ECONOMYNEXT- Sri Lanka’s parliament passed a bill to give an amnesty for people who have not paid taxes but will declare such assets with a 1 percent fee.
There were 134 for and 44 against.
The bill is expected to bring to open any sums of money hidden, boost investments and eventually increase tax collections from the earnings of the assets and better compliance.
“We should have one economy instead of several parallel economies,” State Minister for Money and Capital Markets, Nivard Cabraal said.
A similar bill had been mooted in the 2001-2004 regime of Ranil Wickremesinghe, he said.
However, opposition Samagi Jana Balawegaya legislator Harsha de Silva said that giving tax write off to value-added tax defaulters was wrong.
A business collects value-added tax as an agent on behalf of the state.
Unlike income tax which is paid on the profits on revenues legitimately earned by a business or individual value-added tax is paid by third parties to be passed on to the government and is not revenue earned. VAT is charged on top of business revenues.
De Silva said some small customers would have paid the tax, but the owner of the business would have not paid the tax and has instead used the money to invest in something, perhaps abroad.
The opposition also abstained from the Securities and Exchange Commission law, saying some of its provisions were changed at the last minute to take away the Commission’s discretion to prosecute and those subject to administrative measures can now be appealed to a politician. (Colombo/Sept08/2021)