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Unilever Sri Lanka is being accused of committing a tax fraud of over Rs. 570 million in importing raw materials for its products, according to sources at the Customs Department.

The sources also claim that the multinational consumer goods company is now using top government officials to exert pressure on the Sri Lanka Customs Department to cover the fraud.

According to the sources, during the period from October 2018 to April 2018, Unilever had only paid 25% of the tax due to the Customs Department on the import of palm oil fatty acids used in soap production.

The relevant components have to be imported under HS No. 3823.19.20 but they have been imported under HS No. 3823.19.90. By doing this, the company has evaded paying the relevant taxes, sources said.

 

However, the Customs Department has conducted an investigation and it has been revealed that Unilever Sri Lanka has to pay over Rs. 570 million to the Customs due to this fraudulent act.

 

Customs authorities have asked the company to pay more than Rs. 1 billion, including the tax amount and added fines for non-payment which the company has refused to pay.

Customs authorities had then gone on to file a lawsuit against Unilever under number 19/2021 in the Court of Appeal on January 21, 2021.

This fraud had taken place during the former 'good governance' administration. Although the current ruling alliance came to power promising to take legal action against allegations of fraud and corruption that took place during 'good governance', they are now advocating for the protection of fraudsters instead of taking legal action, Customs sources said.

Top officials in the Customs Department said that current and former government officials are exerting pressure to settle the case in the company's favour.

The government should be partial to the Customs Department which is a state organisation, but instead, those directly or indirectly linked to the government are trying to save Unilever, Customs officials said.

 

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