State institutions dependent on government funding to meet their tax liabilities will qualify to have certain taxes in default for over two or more years written off, under new legislation to be approved by Parliament soon.
The institutions that will qualify for the tax write-off will include public corporations, Government-owned business undertakings, ministries, departments and co-operative societies registered under the Co-operative Societies Law including Co-operative Rural Banks.
A Revenue official said there was no law to write off default taxes from state institutions at present. “Some of the institutions borrow money from the Treasury to pay taxes to the government as there is no law to write-off their default taxes,” he said.
Among the state institutions which have borrowed money from the Treasury is the Sri Lanka Broadcasting Corporation which received Rs. 150 million last year. The Default Taxes (Special Provisions) Bill that was presented in Parliament this week will also provide for a streamlined and speedier process for the recovery of taxes in default and to ensure that in the future, taxes in arrears are maintained at a reasonable limit.
An advisory committee, headed by a retired judge of the Supreme Court, the Court of Appeal or the High Court, will be appointed under the new law. The committee will be consulted on any tax write-off by the Commissioner General of Inland Revenue.
The institutions that will be considered for the tax write-off will be identified by a default tax recovery unit to be established under the purview of the Commissioner General of Inland Revenue.
This unit will within six months prepare and finalise a report identifying taxes in default of the government institutions.
The new law will also make provision for tax defaulting institutions which do not qualify for the write-off to settle the due amount in instalments but such payment will need to be completed within three years. |
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