-By A Special Correspondent
(Lanka-e-News - 07.Oct.2025, 11.10 PM) It was one of the largest financial scandals in Southeast Asia, a case that rocked Sri Lanka’s treasury, brought down officials, and left billions of rupees missing from public accounts. Two decades later, the so-called VAT scam — the grand fraud that siphoned taxpayer money through bogus refund claims — still casts a long, uncomfortable shadow over the country’s political class.
Now, leaked files and newly surfaced testimony have revived a name long whispered in political corridors but never formally interrogated: Imtiaz Bakir Makar, the former minister and son of a onetime Speaker of Parliament. According to those leaks, Imtiaz, then a rising political star and cabinet insider, was shielded from questioning by no less than the president of the day — Mahinda Rajapaksa — while his associates and in-laws took the fall.
Two decades on, the question refuses to die: Was the true mastermind ever investigated?
The VAT refund racket, first uncovered in the mid-2000s, was simple in design and devastating in effect. Companies filed fake VAT refund claims using forged invoices and false customs declarations. Officials inside the Department of Inland Revenue processed the claims with extraordinary speed.
By the time auditors caught on, tens of billions of rupees had already been paid out to ghost companies — money that should have gone to hospitals, schools, and rural infrastructure.
Several mid-level officials were arrested. A few businessmen, notably from Colombo and Gampaha, were convicted. But, as insiders have since admitted, “the top was protected.”
Leaked internal correspondence from 2006, seen by The Sunday Times, indicates that certain names were “removed from the list of persons of interest on the instructions of the Presidential Secretariat.” Among those, one senior Inland Revenue officer claimed, was “a minister closely connected to the Bakir Makar family.”
At the time, the trail went cold. But with the NPP government’s new anti-corruption drive, attention is swinging back to old, unfinished business — and Imtiaz Bakir Makar’s name is once again on the radar.
The Bakir Makar name carries political weight. The patriarch, a former Speaker of Parliament, was part of Sri Lanka’s elite establishment in the post-independence era. His son Imtiaz followed a similar path — educated in Colombo, fluent in Sinhala, later serving as a cabinet minister.
But family history, insiders say, is far more complicated than the public biography suggests.
When Imtiaz was still in school, he reportedly lived for several years with the respected businessman Falil Hajiyar. The two families were close, and there was once talk of a marriage alliance between Imtiaz and Hajiyar’s daughter. Instead, Imtiaz later married into a tea-trading family — a decision that, sources claim, tied him to individuals who would later appear in court in connection with the VAT refund scandal.
Two of his brothers-in-law, according to case files, were among those charged and convicted. Yet Imtiaz himself was never questioned.
A senior retired investigator told The Times:
“Everyone knew who pulled the strings. But we were told to stay away. The instruction came from the very top.”
If the leaked correspondence is accurate, the “top” meant then-President Mahinda Rajapaksa.
At the height of the investigation in 2006, several officials reportedly sought to interview Imtiaz regarding payments linked to shell companies that received suspicious VAT refunds. According to two retired officers from the Criminal Investigation Department, a directive arrived “from Temple Trees” ordering them to halt inquiries involving the former minister.
At the time, the government was already facing multiple corruption allegations. Protecting a political ally — particularly one with influence over the media — was, insiders say, a matter of “strategic containment.”
“Imtiaz was untouchable,” one former Cabinet colleague recalled. “He was the bridge between the political elite and the press. You couldn’t move against him without half the newsroom turning against you.”
Today, Imtiaz Bakir Makar lives comfortably. He owns several properties in Colombo and the central highlands. His public persona is that of a thinker and reformist — hosting YouTube shows, writing books, and speaking eloquently in Sinhala about market liberalism, civic harmony, and the dangers of populist socialism.
To his critics, it is an irony bordering on hypocrisy.
“The man who once managed a department accused of stealing from taxpayers now lectures on ethics,” said one prominent columnist.
His family has likewise prospered. One of his children works with a UN-affiliated development agency; another reportedly serves with a Commonwealth High Commission. These connections, critics argue, have insulated the family from scrutiny.
What remains unexplained, however, is the source of the wealth that enabled that comfort — the properties, the foreign education, and the lifestyle that far outstripped Imtiaz’s declared income as a parliamentarian and cabinet minister.
At the core of the VAT scam was the creation of fictitious export companies that claimed massive tax refunds. Many were registered under borrowed names or through shell entities. Funds moved swiftly from the Treasury to private accounts and then vanished through layers of transfers.
Investigators at the time identified over 3,000 fraudulent claims worth more than Rs. 3.5 billion. Only a fraction was ever recovered.
Where did the rest go?
The leaked documents suggest that a portion may have been “invested domestically in property and shares through intermediaries.” Among the properties listed in one internal memo are two Colombo commercial lots purchased by “a relative of a senior cabinet member” — initials I.B.M.
While no direct evidence links Imtiaz personally to those accounts, the overlap of names, timelines, and associates has raised renewed interest among forensic auditors working with the NPP administration’s new Proceeds of Crime Unit.
During his years as Media Minister, Imtiaz built a powerful network of journalists, editors, and broadcasters. Many received government-sponsored appointments, training scholarships, or grants.
Critics argue that this network later became a protective wall when allegations surfaced. Stories that touched on the VAT scandal or hinted at ministerial involvement were quietly buried.
One veteran journalist, now retired, confessed:
“We were told not to touch the story. There was fear, but also loyalty. Imtiaz was a gentleman, always polite, always helpful. Nobody wanted to believe he was part of it.”
That carefully cultivated image — articulate, urbane, and liberal — continues to shield him today.
Under Sri Lanka’s new NPP government, the rhetoric has changed dramatically. The administration has vowed to revisit historical corruption cases “without regard to political privilege.”
The Proceeds of Crime and Anti-Corruption Act, enacted earlier this year, grants investigators sweeping powers to trace assets, reopen dormant files, and prosecute beneficiaries of public-fund theft — even decades after the crime.
Officials confirm that among the cases earmarked for reassessment is the VAT refund scam. Whether that reassessment will reach as high as the Bakir Makar family remains to be seen.
A senior NPP parliamentarian told The Times:
“If there is evidence, no family name will protect anyone. The people are tired of selective justice.”
Behind the political legacy lies a more personal drama. According to family acquaintances, Imtiaz’s mother lived most of her later years in poverty after his father — the former Speaker — remarried. She reportedly worked in domestic service to support herself.
For some, that history adds a tragic dimension to the story: a son who rose from hardship, only to be consumed by the temptations of power. For others, it simply underscores the moral contradictions of a man now reinvented as a public moralist.
“He speaks about integrity and compassion,” said one former colleague. “But integrity begins with telling the truth about your own past.”
Complicating matters further are family ties within Sri Lanka’s legal establishment. Several cousins and relatives of Imtiaz reportedly serve in the Attorney General’s Department and the Judiciary.
That overlap, some argue, has contributed to the reluctance to reopen the file.
A retired magistrate familiar with the original VAT proceedings remarked:
“Whenever a file had his name, it simply stopped moving. It wasn’t just political interference — it was institutional hesitation.”
Whether that hesitation can survive the NPP’s new anti-corruption regime remains doubtful.
Imtiaz Bakir Makar has, in recent years, reinvented himself as a commentator on governance and civic reform. His YouTube channel, popular among urban professionals, features long monologues on democracy, entrepreneurship, and pluralism.
He is articulate, charming, and often critical of both major parties — portraying himself as an independent voice of reason in a polarized landscape.
Yet, every time he speaks of “justice” or “fiscal accountability,” an older audience remembers the unasked questions.
“He tells the youth to be honest,” one civil-society activist said wryly. “That’s rich, coming from someone whose name was on the VAT list.”
In Colombo’s diplomatic circles, Imtiaz’s family remains well-connected. One son reportedly holds a senior position with a UN-linked agency, another is said to work at a major foreign mission. There is no suggestion that they have done anything improper.
But for critics, the optics matter: the children of a man once linked to one of Sri Lanka’s largest public-finance scandals enjoying positions of global respectability, while the victims of that theft — ordinary taxpayers — continue to pay the price in broken schools and crumbling hospitals.
“If the money was clean, let them prove it,” a retired Inland Revenue officer said. “If it wasn’t, then the new law must apply equally to everyone.”
Old accusations continue to haunt the former minister. Among them, a curious “roof-sheet” case dating back to his tenure overseeing relief supplies — allegations that corrugated roofing materials meant for displaced families were diverted and sold on the open market.
No formal charges were ever brought. Yet the story persists, retold with relish in tea shops and online forums as a symbol of impunity.
To his detractors, it encapsulates the pattern: small scandals ignored, big scandals protected.
Reopening a case this old is no easy task. Files have vanished, witnesses have migrated or died, and memories have faded. Yet the new investigative tools under the Proceeds of Crime Act may offer a path.
Forensic accountants can now trace historical property purchases and cross-reference them with tax records and declared incomes. Digital reconstruction of land registries — a project launched quietly in 2024 — has already unearthed several suspicious asset transfers dating back to the VAT-scam years.
If even one property is proven to have been purchased with diverted public funds, it could trigger a cascade of legal consequences — not only for Imtiaz but for any family member who benefited.
In Sri Lanka’s culture of selective amnesia, old scandals rarely die; they simply fall asleep until a new government decides to weaponize them. But the VAT scam occupies a unique place — a wound that never healed, because justice was never complete.
The public remembers. Taxi drivers still recall the headlines, traders still curse the names. The phrase “VAT karaya” — “the VAT man” — remains shorthand for elite corruption.
Reopening the case, analysts say, would be symbolically powerful for the NPP: proof that its anti-corruption drive is not a slogan but a reckoning.
For all his eloquence, Imtiaz Bakir Makar has rarely addressed the scandal directly. His autobiography, published quietly three years ago, devotes just two paragraphs to the period, describing it as “a time of great misunderstanding.”
There is no admission, no denial, only silence — a silence that now feels louder than ever.
“He wants to be remembered as a reformer,” said a senior journalist who once worked under him. “But history remembers the accounts, not the speeches.”
As the NPP government’s anti-corruption task force expands its list of historical investigations, the VAT scam sits near the top. The public mood has shifted: where once there was resignation, there is now expectation.
If the investigation reaches Imtiaz Bakir Makar, it will test not only the man but the system itself — whether Sri Lanka can finally confront its past without fear or favour.
For now, the former minister continues to appear on YouTube, discussing ethics and economics, smiling into the camera. Behind that smile lies a story unfinished — a ledger not yet balanced.
The ghosts of the VAT scam are stirring again. And this time, the country may finally demand to see the books.
-By A Special Correspondent
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by (2025-10-07 17:48:08)
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