News
Unions warn of Rs. 300b loss if tax amnesty is not changed
Inland Revenue Department (IRD) officials have called on Finance Minister Basil Rajapaksa to reduce the period for the proposed tax amnesty for undisclosed income, warning that the government could lose a revenue of up to Rs 300 billion .
The request was made during a meeting presided over by the Finance Minister and attended by senior IRD officials and trade union representatives. At last week’s meeting, they discussed the implications of the proposed Finance Bill.
The officials proposed that instead of offering the amnesty for non-payment of Income Tax and Value Added Tax todate, the offer should exclude the 2018/19 and the 2019/20 period to reduce the loss of revenue.
They pointed out that this was the period when they were making the assessments for the 2018/19 and 2019/20 periods and the department’s revenue collection process would be severely affected if the amnesty was granted.
They proposed that the inclusion of these periods could give an undue advantage to those who are due to pay their income tax and VAT.
A senior official said there was opposition from department officials who were concerned over the amnesty’s impact on the revenue collection.
He said one of the issues was that the amnesty gave the wrong message to taxpayers who genuinely disclosed their income.
He said the amnesty’s objective was to draw foreign investments to the country at a time when Sri Lanka was facing a dollar crisis. He pointed out similar amnesties had been granted earlier too.
A senior Finance Ministry official that said were making preparations to offer the amnesty as soon as Parliament approved it.
The Supreme Court ruling on the petitions challenging the bill is due to be disclosed in Parliament next week.
A tax amnesty gives time for tax defaulters to pay a nominal fee and declare the undisclosed money without a penalty or or criminal prosecution.
Meanwhile, the IRD’s revenue target for this year has been reduced to Rs 590 billion from the usual target of more than Rs 1300 billion.