News
Banks, finance and other companies requested to pay taxes upfront
The Inland Revenue Department (IRD) has called on large banks, finance companies and private sector companies to pay their first quarter taxes upfront, ahead of the due date, as the Government is facing a cash-flow problem in paying public sector salaries.
The Sunday Times learns the Treasury has requested the IRD to ask these large corporate taxpayers to cough up the money due to the difficulty in finding the funds to pay salaries.
Senior IRD Commissioner and IRD Commissioners’ Association President Sarath Abeyratne confirmed the IRD was seeking the support of the large-scale taxpayers to make a “goodwill gesture” towards a Government that was in a financial crisis. So far the Treasury and the Central Bank have been printing money to the tune of several billions resulting in sharply rising inflation and the cost of living index skyrocketing.
About Rs 59 billion had been collected from several large companies with a turnover of more than Rs. two billion following the then Finance Minister Basil Rajapaksa’s budget proposal. Mr. Abeyratne said that these companies “promptly complied” with the IRD’s request to pay the surcharge on time, and added that the department hoped to collect about Rs. 100 billion from this once-and-for-all surcharge.
The next date of payment of the surcharge tax would be during June-July this year for the companies which had not responded to IRD’s call, he added.
The private sector has already complained that retrospective taxes, however, undermine the rule of just law and bring in uncertainty to the business environment.
A 2.5 percent ‘social security’ tax will be charged from companies above Rs. 120 million in turnover with effect from April 01. The social security tax is expected to bring in Rs 140 billion.
Meanwhile, the Central Bank is continuing to print rupee notes containing the signatures of Basil Rajapaksa, the former minister, and former Governor Ajith Nivard Cabraal, a request under the Right to Information Act has revealed.
The order has been placed and production is ongoing, the regulator said, adding that the notes (and the signatures on them) are dated September 15, 2021.
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