CB rules on secret foreign accounts being finalised
The Central Bank (CB) has drafted regulations to relax rules for Sri Lankans owning secret overseas accounts allowing a ‘no questions asked’ policy of bringing back US$5 million and plans to present these proposals to the CB governor next week, sources close to the CB said.
Currently, if someone brings money into the country that person needs to sign an asset and liability declaration form. “With the new rules, those bringing $5 million or above into Sri Lanka, won’t have to sign this form,” a source close to CB told the Business Times. While industry analysts have raised issues saying that this may be an attempt to protect those with secret foreign balance sheets, the CB says this move will boost foreign cash flows. The CB says granting a sort of a tax amnesty to those with secret foreign accounts will boost dollar remittances into the country.
These developments follow the discovery of some influential Sri Lankans being on a list of secret foreign accounts exposed by the International Consortium of Investigative Journalists (ICIJ) recently. Sri Lanka bans offshore accounts for individuals and it’s not a legal way to save taxes. Nearly 30 Sri Lankans and two companies have been identified as having secret offshore accounts by the ICIJ report.
The source said that it is likely that changes to exchange control regulations will be done within the next few months. “If they bring a minimum investment amounting to $5 million into the country they don’t need to declare their accounts abroad,” he said.
He said that the decision to tax the amounts these account holders would be able to bring in without questions being asked, is under discussion.