22 Mar 2013

Cooks initiates Colagate probe

1:36 pm on 22 March 2013

The first stage of a Cook Islands parliamentary inquiry into the so-called Colagate affair has been initiated.

According to parliamentary clerk Tupuna Rakanui, the Crown Law office is formulating terms of reference, which the Public Accounts Committee can use in its inquiry into the historic invoice splitting scandal.

Colagate refers to an exclusive 20-year agreement between Customs and Cook Islands Trading Corporation that allowed the corporation to separate its invoices until 2009.

It paid a 10 percent levy on packaging and a 40 percent levy on contents, whereas other local importers had to pay the full 40 percent levy on the cost of the product as a whole.

While MP Norman George asked parliament to set up a Royal Commission of Inquiry into Colagate, it was deemed too expensive by the government.

Both the Prime Minister Henry Puna and the Finance Minister Mark Brown suggested the Public Accounts Committee could look into it.