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Sunday October 1st, 2023

Inland Revenue Department in Sri Lanka flashes red light as firms charge wrong VAT

Inland Revenue Department officials addressing reporters in Colombo.

ECONOMYNEXT- Sri Lanka’s Inland Revenue Department officials said they have found businesses which have been charging Value Added Tax (VAT) above the reduced rate of 8 percent, and legal action will be taken against them.

“There’s a complaint that the tax benefits are not going to the public and since Tuesday, we have been investigating various businesses,” Deputy Commissioner General Tax Administration H. M. W. C. Bandara said.

President Gotabhaya Rajapaksa, who cut tax rates as a part of his election promise, has repeatedly asked firms to reduce prices of goods and services.

Speaking to reporters in Colombo, Bandara said some bakeries and restaurants were found charging VAT at 15 percent from customers.

“There are provisions in the VAT Act to penalize the offenders,” Bandara said.

“We have published on our website the businesses which are not liable to collect and pay VAT, and we are checking whether they are charging VAT.”

“Businesses have also been asked to display their VAT registration on their premises.”

Department Spokesperson and Deputy Commissioner General Shelton De Soyza said problems may arise if a firm not liable to VAT provides a VAT invoice to a third party liable to the tax, thereby depriving the third party from claiming input VAT.

In such cases, attempts would be made to mediate and reverse the VAT charge, but penalties under the law are also a possibility, he said.

Bandara meanwhile said most of the complaints on higher prices are due to firms having increased their prices to the same as the pre-VAT levels.

“They are not liable for VAT but they are not reducing prices. That is the main problem,” Bandara said.

“However, unless there is a maximum legislated price, the prices can only come down through competition among business owners. When there is competition, each business will try to sell at lower rates, but that will take time,” he said.

Deputy Commissioner General Customer Service, Compliance Support & Promotion R. M. Jayasinghe said as long as businesses follow the reduced VAT rate, they have the freedom to charge however much they want.

In response to a question from a reporter, he admitted it is possible that some firms had kept their prices unchanged amid a depreciating currency in 2018 and the slow growth over the past two years, and may be attempting to recover the lost profits through higher margins at present. (Colombo/Jan17/2020)

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  1. Renu says:

    President has to make a surprise check in every Industry to see the benefit is passed on to the consumer, well that is a doers job not one of a manager ,Others could not be trusted !! Bribes is the protected word

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  1. Renu says:

    President has to make a surprise check in every Industry to see the benefit is passed on to the consumer, well that is a doers job not one of a manager ,Others could not be trusted !! Bribes is the protected word

Sri Lanka National Christian Council opposes Online Safety Bill

ECONOMYNEXT – The National Christian Council of Sri Lanka (NCCSL) in a statement on the Online Safety Bill, said that the existing legal regime is adequate to deal with instances of harmful speech, making it unjustifiable to enact such “stringent laws”.

The Council called upon the government to withdraw the bill immediately.

The body expressed “deep concern” over the proposed bill, detailing its potential to curtail freedom of speech and how, according to the Council, the piece of legislature is inconsistent with the principles of democracy.

“The bill proposes the establishment of an entity named the Online Safety Commission without provisions to guarantee its independence and impartiality,” the statement said.

Chapter 3 imposes restrictions on online communication of certain statements, many of which are vague and overbroad, leaving room for executive control and the curtailing of legitimate criticism and dissent that are basic features of democracy, the statement said.

“The laws granting wide discretion to the executive and its investigative agencies with expansive reach have been misused in the past.”

The Council said that the bill was not drafted with the process of public consultation and discussion, which might have ensured the bill would be less draconian in nature.

“The National Christian Council of Sri Lanka calls upon the government to withdraw this anti-human rights and anti-democratic bill immediately.” (Colombo/Sep30/2023)

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Sri Lanka to implement new vehicle revenue licence issuing system

ECONOMYNEXT – A new system of issuing vehicle licences called eRL 2.0 is to be implemented in 5 provinces, excluding the Western Province, from 3 October onwards.

The new system is to be implemented beginning in the North West, South, North Central, Central and Sabaragamuwa provinces, respectively. The existing vehicle licence issuing system eRL 1.0 will continue to be used in the Western Province.

The issuing of revenue licences islandwide at Department of Motor Traffic head offices and regional branches will be temporarily halted on October 2.

The facility of obtaining vehicle permits online will also be temporarily halted on 6 October till midnight.

The Sri Lanka Information and Communication Technology Agency (ICTA) and the Provincial Motor Traffic Departments are working to modernize the current vehicle revenue license issuance system.

The implementation of the new eRL 2.0 system is expected to be an important step in the digitalisation of Sri Lanka. (Colombo/Sep30/2023)

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Sri Lankan Airlines flights cancelled as aircraft grounded

ECONOMYNEXT – State-run SriLankan Airlines has apologized to passengers who were stranded as multiple aircraft were grounded at the same time.

The airline said it has strict procedures which requires aircraft to be grounded when technical issues are discovered.

“Unfortunately, in this case we suffered a number of groundings at the same time,” the airline said.

“We apologize for the disruption and inconvenience caused and assure all our loyal customers that we are working diligently to minimize such occurrences moving forward.”

The airline said it was booking passengers on other airlines while some have been accommodated at hotels. (Colombo/Sept30/2023)

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