A recent Right to Information inquiry revealed that the Hambantota International Port Group (HIPG), managed by a Chinese firm, has allegedly avoided paying Municipal Council assessment taxes amounting to over LKR 125.9 million. Official records cited by Times Asian indicate that as of December 31, 2025, the outstanding balance for the port property stood at LKR 125,938,793.50, inclusive of warrant charges and penalty interest.
To address the outstanding dues, the Hambantota Municipal Council issued a Red Notice to the port management, aiming to seize the property under the Municipal Councils Ordinance due to an overdue amount of LKR 85,292,529 spanning two quarters. Despite prior discussions at council meetings on tax arrears surpassing LKR 250 million and Red Notices amounting to LKR 140 million, the Council has officially stated that no arrears exceed LKR 250 million at present.
In response to the tax evasion issue, the port management secured an interim injunction against the council, preventing the classification of the premises as a “commercial port” and halting property confiscation proceedings. Subsequently, the council enlisted a private law firm to handle the appeal, funding legal expenses amounting to LKR 1 million from municipal funds.
Following a detailed 10-point RTI application related to the tax evasion matter, the Municipal Council declined to answer most queries and refused to provide certified copies of the final official valuation report of the port premises and the Red Notices, citing confidentiality reasons. Allegations in the report suggest that the Council withheld information on ongoing court cases, interim injunctions, and the selection process of the private law firm.
