The Inland Revenue Department’s (IRD) scheme of issuing duty concessionary motor vehicle permits for genuine tax payers maintaining tax compliance has now been tainted with malpractices at a high level, officials said.
This vehicle permit scam came to light with the revelation of details on the issue of concessionary motor vehicle permits for two taxpayers in Kurunegala and one in Colombo. They had allegedly made bogus claims with the connivance of a high ranking tax official.
The two in Kurunegala were questioned by the police on a complaint made to the Criminal Investigation Department (CID), IRD sources said.
A large number of duty concessionary motor vehicle permits have
been issued to people who were not eligible under the criteria, the officials alleged.
A taxpayer whose income tax liability in respect of any period of 5 years of assessment is not less than Rs. 250,000 a year is eligible for such permits in accordance with the Finance Act No.11 of 2006 as amended by the Finance Act No. 13 of 2007. Such liability should be settled in full and returns should be submitted on or before the due date.
In some cases, the IRD has issued motor vehicles permits with 75% duty concession to taxpayers who have paid only Rs. 400,000 when they needed to pay Rs.1 million to gain eligibility, the officials said.
Some have received permits without paying a cent as taxes, the officials alleged.
The department has failed to take action against tax officers who were involved in VAT frauds, Golden Key Credit Card Company, and the Capri Club scam, even after conducting internal inquiries in the recent past, they said said.
Tax Chief K.M.S. Kandegedera was not available for comment.
Several legal and administrative measures have already been instituted to widen the tax base and encourage and reward voluntary compliance by issuing of privilege cards to compliant tax payers, discounts for speedy compliance and in some cases even duty concessions for vehicle imports. However, the efficacy of these schemes needed to be evaluated more closely, a senior official of the Ministry of Finance said.
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