Marikkar Alleges Rs. 9.7bn Tax Evasion by Five Coconut Oil Importers

Five coconut oil importing companies have evaded Rs. 9.7 billion in taxes over the past two and a half years, Samagi Jana Balawegaya (SJB) MP S.M. Marikkar alleged in Parliament yesterday (06) reigniting scrutiny over prolonged non-payment of VAT and the Social Security Contribution Levy by a small group of firms.

The allegation, raised by Marikkar for the sixth time since 1 January 2024, was directed at the government amid mounting questions over why the companies had continued to evade payment despite repeated assurances of recovery.

Marikkar noted that he had previously raised the matter with the Prime Minister on one occasion, with Trade and Commerce Minister Wasantha Samarasinghe on two occasions, and with Finance Deputy Minister Dr. Anil Jayantha Fernando on two further occasions, before bringing it before Parliament again yesterday.

He said the Prime Minister had assured the House last year that the outstanding taxes would be recovered, yet by the end of July this year the five companies had still not settled the Rs. 9.7 billion owed, having continued to import coconut oil throughout the period without payment.

He said the companies had previously sought tax concessions from the former government, a request the Inland Revenue Department had declined to approve.

He questioned why one importer had continued to meet its tax obligations while the remaining five had been permitted to avoid payment through repeated appeals, pointing out that the Gazette clearly classified coconut oil production as liable for an 18% VAT and a 2.5% Social Security Contribution Levy.

Noting that individuals were routinely arrested over minor tax infringements, Marikka said there was reasonable suspicion as to why these particular companies had continued to escape enforcement.

He further alleged suspicion that firms claiming exemptions may have imported unrefined crude coconut oil, potentially allowing products contaminated with aflatoxin to enter the market, and called on the government to expedite legal proceedings and recover the outstanding sum without further delay.