Arjun Aloysius sentenced to six months imprisonment over VAT evasion

The Colombo Magistrate’s Court yesterday sentenced controversial businessman and W.M. Mendis Distilleries Director Arjun Aloysius, along with two other officials, to six months of simple imprisonment for failing to pay Rs. 3.5 billion in Value Added Tax (VAT). The two other persons sentenced along with Aloysius were fellow W.M. Mendis Distilleries Directors A.R. Dinendra John and Prasanna Kumarasiri de Silva.



The case was brought against the distillery company by the Inland Revenue Department (IRD) for defaulting on tax payments owed to the Sri Lankan Government between 2016 and 2019. The significant VAT amount had remained unpaid despite repeated legal measures to enforce compliance.

The hearing took place before Colombo Additional Magistrate Bandara Ilangasinghe, who imposed the prison sentence after the accused failed to complete the required payments. On 14 November 2023, the Court had previously ordered the trio to settle outstanding taxes, but the defendants did not fulfil the payment obligations within the stipulated time frame, leading to the sentencing.

Later in the day, the defendants filed an appeal, seeking to overturn the Court’s decision. The appeal was also an attempt to gain permission to settle the outstanding VAT in instalments. However, the Colombo Magistrate’s Court swiftly rejected the appeal. The request to pay the overdue taxes in instalments was also denied by the Court. 

This high-profile case involving VAT evasion has drawn considerable public and media attention, with Aloysius being a well-known figure previously embroiled in the controversial Central Bank bond scandal.