CA Sri Lanka asks acting Tax Commissioner General: “Prove it if our members are involved in any malpractice”
Arjuna Herath, President of the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka), has sent the following letter in response to last week’s article published in the Business Times under the heading “Tax Consultants’ Mafia troubles acting Tax Chief”. Excerpts of the letter:
CA Sri Lanka is disturbed by the contents of the said article which appears to be based on a communication between the newspaper and the 
Inland Revenue Department (IRD). CA Sri Lanka is understandably disturbed by this news article as a majority of Tax Consultants who act as authorised representative are members of the institute. As such we believe by reference to tax consultants in general in the article has brought immense harm to the image of our members practising as authorised representatives.
Authorised representatives referred to as tax consultants in the newspaper article under reference is a formal legislated role to assist IRD and tax payers in tax compliance. We believe these authorized representatives play an invaluable role in educating the tax payers on their obligations and compliance requirements.At the same time they assist IRD officials to understand client’s circumstances/context in applying the tax rules and regulations appropriately ensuring a fair enforcement of tax rules/regulations and efficient collection of tax. Our members who are authorised representatives have played a significant role in building bridges between the IRD officials and tax payers and improving efficiency of tax collection. We believe, if not for the authorised representatives the cost of tax administration will be far greater than what it is today particularly given the very frequent changes in tax policy and tax regulations.
It should be also noted the tax paying obligation is well defined through legislation and regulations and there should be no subjectivity and ambiguity in fulfilling tax obligations. In this context there should be no room for discretion or concessions. The tax payers are also intelligent and knowledgeable about their tax obligations as it forms a significant cost of doing business. Further, a fair amount of time and effort is put in by CA Sri Lanka and authorised representatives on educating tax payers on tax legislation and regulations. Hence, it is not clear as to how the authorised representative can mislead the tax payer on obtaining concessions.
CA Sri Lanka is the foremost national professional accounting body set up by an act of Parliament over half a century ago and is engaged in the field of taxation since its inception; from grooming students to become skilled professionals, and to consistently harness the skills in taxation among its members and those outside such as officials of the IRD, members of other professions and the general public on all matters connected with taxation. The institute is the only body with a full Tax Faculty consistently engaging both members and outsiders on matters related to taxation.
It is therefore important that the IRD and CA Sri Lanka forge a strong partnership in the transformation of the tax compliance environment and culture in this country and in the proper implementation of the tax policy of the government. We intend to work with IRD to improve capacity to respond to the needs of tax payers and to improve the capabilities in relation to concepts such as understanding tax obligation based on greater commercial awareness, impartiality, proportionality, openness (disclosure and transparency), and responsiveness.
With regard to the allegations levelled against tax consultants in the article under reference, we have written to the Acting Commissioner General of Inland Revenue requesting her to refer to the institute with proof and evidence of any member of our institute who are found to be involved in any malpractice as suggested in the said article. We have indicated to her that such process would assist the institute in conducting its own disciplinary inquiry to investigate if such members have acted in violation of our code of ethics.
Business Editor notes: The report was based on a discussion between the acting Commissioner General and trade unions leaders which the Business Times was invited to attend.