By Roy Denish.
VFS visa scandal audit findings expose unpaid taxes, unauthorised fees and millions in Sri Lankan visa revenue sent offshore.
An explosive special investigation by the National Audit Office (NAO) has unmasked a predatory financial arrangement in Sri Lanka’s short-lived outsourced online visa operation, exposing catastrophic state oversight, blatant tax evasion, and systemic revenue leakage that funnelled millions of dollars away from a struggling state treasury and into offshore private accounts.
The devastating report places a harsh spotlight on the December 2023 deal struck between the Department of Immigration and Emigration and an offshore consortium comprising GBS Technology Services, IVS Global-FZCO, and tech vendor VFS Global. Operational from April 17 to August 2, 2024, the scheme was halted only after the Supreme Court intervened following intense public fury, legal challenges, and allegations of systemic corruption.
The Auditor General’s detailed findings outline an extraordinary apparatus designed to extract unearned profits from international visitors while ignoring national tax obligations. During their brief four-month operating window, the private contractors collected an 18 percent Value Added Tax (VAT), alongside a 2.5 percent Social Security Contribution Levy (SSCL), from international travellers.
Yet, instead of settling their obligations with state authorities, the consortium retained the funds, failing to hand over at least $1.245 million in VAT and $127,970 in SSCL to the Inland Revenue Department.
Further exploiting the system, the contractors collected an additional $1.8 million by imposing compulsory, unauthorised service fees on tourists from countries explicitly granted official visa-fee waivers by the Cabinet. Regional visitors from SAARC nations, who were entitled to treaty-mandated concessionary rates, were similarly targeted and systematically overcharged.
In what auditors highlighted as an unparalleled breach of basic public finance controls, foreign visa revenues were never deposited into Sri Lankan state accounts. Instead, millions in public revenue were funnelled directly into private, foreign-domiciled bank accounts controlled by the consortium.
This deliberately opaque arrangement created a massive accountability vacuum, leaving state officials completely blind to actual transaction volumes and preventing any meaningful verification of the total income generated through the visa system.
The political and legal fallout from the debacle has escalated into an unprecedented crisis for public administration. Sri Lanka’s former Controller General of Immigration was handed a two-year prison sentence for contempt of court after defying Supreme Court orders to shut down the private portal and restore the state-run Mobitel platform.
As public outrage mounts over the lack of criminal accountability for the political architects of the deal, VFS Global has attempted to distance itself from the controversy, claiming that it acted solely as a technical subcontractor while placing primary liability on IVS-GBS.
Unmoved by these corporate deferrals, the Auditor General has called for immediate asset recovery and urged law enforcement agencies to launch comprehensive criminal prosecutions against all public officials and private entities involved in procuring and executing the multi-million-dollar arrangement.
Funny you don’t mention the master crook behind the scam. Chicken?