The Committee on Public Finance (CoPF) has refused to approve a gazette notification submitted by the Finance Ministry over the Electric Vehicle (EV) importation scheme provided to Sri Lankans working abroad, citing lack of transparency.

The programme was initiated by the Labour Ministry under Minister Manusha Nanayakkara.

Since the Ministry of Labor and Foreign Employment has refused to provide information regarding those who have imported vehicles when requested by the Ministry of Finance, instructions given to provide all information including the party denoted as the Facilitator.

Since there is no transparency in the scheme of providing fully electric vehicle licenses to Sri Lankans working abroad and it appears that there are many issues pertaining to the matter, CoPF Chair – Dr. Harsha de Silva instructed that a full analysis need to carried out jointly with the Ministry of Finance, the Central Bank, Sri Lanka Customs and the Ministry of Labor and Foreign Employment. 

The Chair further instructed that a report be submitted within two weeks on the said. 

Furthermore, until the analysis is received, it is not possible to give approval to the relevant gazette extending the period of licensing, the Chairman of the Committee Said.

When preparing this analytical report, it was also instructed to find out whether foreign remittances, which is the desired objective, have been received at a significant level through this system, or if some persons have misused this facility when preparing this analytical report.

The Committee Chair stated the said when the CoPF took into discussion the Gazette No. 2368/24 published to extend the period of the scheme for providing fully electric vehicle license to Sri Lankans employed abroad until September 30, 2024.

According to the circular issued by the Ministry of Labor and Foreign Employment, the scheme of providing fully electric vehicle licenses to Sri Lankans employed abroad was implemented and luxury car tax concessions of up to 12 million rupees were given to workers who have remitted $20,000 or more to the country. The period of this scheme, which was implemented for the first time from the gazette published on the 10th February 2023, has been extended by the gazette issued on 31st May 2023 and further extended by the gazette of 24.01.2024.

The Committee Chair further stated that although the Ministry of Finance had requested the Ministry of Labor and Foreign Employment to provide all relevant information including the persons whose vehicles were brought from the beginning of this process, the Ministry of Labor and Foreign Employment has informed that the Attorney General should be inquired about the provision of confidential and private information. However, the Committee pointed out that there is no transparency or proper regulation here.

In this context, the Chair stated that many allegations of various irregularities have been reported to the Committee and also stated that through this, vehicles with a tax relief amounting to Rs. 100 million have been imported. It was disclosed that 1019 licenses have been granted so far and 109.8 million USD remittances have been received through this. The officials also said that the value of the licenses granted so far amounts to 46 million dollars. 

The Committee Chair pointed out that even if these remittances are added to the account at once, irregularities may occur in the qualification of a foreign worker for this facility and through this system various smugglers will also be given space for money laundering. Furthermore, it was discussed during the Committee that there is a doubt whether the workers who do normal jobs have brought such valuable vehicles. It was also emphasized here that irregularities should not be allowed to happen as this is the only opportunity available for importing vehicles in a background where the import of vehicles is prohibited.

Furthermore, the Chair pointed out that there is a group called Facilitator in this process and no information about them has been given. Accordingly, the Ministry of Labor and Foreign Employment was instructed to provide the same information immediately. Accordingly, the Committee Chair stated that he will have to consider all the information in the future and take a decision on giving approval to this gazette.

In addition, three orders published in Special Gazette Nos. 2371/48, 2371/49 and 2371/50 under the Foreign Exchange Act, Extra Ordinary Gazette No. 2369/27 and 2374/19 published under the Finance Act No. 25 of 2003 were also considered to which approval was given.