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Petitions filed against Finance Bill, more to follow
View(s):Petitions have been filed before the Supreme Court stating that several provisions in the Finance Bill introduced by the government to grant amnesty to tax evaders are inconsistent with the Constitution, and would require the bill to be passed by a special majority in Parliament and the people at a referendum.
The bill was presented to Parliament this week. Under provisions of the bill, if a person fails to disclose the taxable assets and is willing to immediately invest the equivalent amount in the country, he or she can invest in other financial instruments such as purchase shares of a resident company, treasury bills or treasury bonds issued by the Central Bank, debt securities issued by a resident company in Sri Lanka or buy any movable or immovable property in Sri Lanka.
This section of the bill will come into effect on or after the date of commencement of this Act, but prior to December 31. On voluntary disclosure, a one paer cent nominal tax would be payable.
The bill was gazetted by the Finance Ministry days after new Minister Basil Rajapaksa took office.
In his SC petition, Samagi Jana Balawegaya MP Eran Wickramaratne notes that the bill grants full immunity, also referred to as a ‘tax amnesty’ from liability to pay any tax, penalty or interest, or from any investigation or prosecution.
The petition notes that the sum to be collected as a ‘Tax on Voluntary Disclosure’ of 1% of the sum disclosed is far lower than the tax liability of the persons who have already paid tax in terms of applicable existing law.
The grant of the tax amnesty would legitimise fraud on revenue perpetrated by those to whom the amnesty is granted, the petitioner further argues.
Some clauses in the bill are discriminatory of taxpayers/citizens who have already made payment of the taxes, he observes.
Former Janatha Vimukthi Peramuna MP Sunil Handunnetti in his petition argues that the purpose of the bill is to extend impunity to persons who have accrued unlawful and illegal undisclosed taxable supplies, income and assets and to accommodate such persons to invest in such undisclosed taxable supplies income or assets in the country.
More petitions against the bill are expected to be submitted this week.