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Sri Lanka to punish auditors and tax consultants, tax court planned

ECONOMYNEXT – Sri Lanka will punish auditors and tax consultants and bar them from practicing if they prepare false tax filings, Prime Minister and Finance Minister Mahinda Rajapaksa said presenting a budget for 2021.

“I propose to introduce punitive legal provisions to ensure that the private tax consultants and auditors representing the tax payers and prepares and certifies fraudulent tax reports, aids and abates in such action will be faced with such consequence including being barred from practicing,” PM Rajapaksa told parliament.

Sri Lanka has several tax consultancies which have publicly come under fire from ex-Treasury Secretary P B Jayasundera who is now Secretary to the President.

Meanwhile Rajapaksa said a special tax appeals court will be set up.

“Further I propose to strengthen the legal provisions relating to the establishment of specific time frames for the implementation of rulings and for the settlement of appeals submitted against the tax administrative decisions made under the Inland Revenue Act,” he said.

“It is also proposed to establish a special tax appeals court to resolve tax appeals.”

He said from April 01, 2021 all companies would be required to file tax returns electronically thought a ‘E-filing’ system and use a Tax Identification Number.

Sri Lanka will also issue directions on loan loss provisions of banks for tax purposes.

“I also propose to issue relevant instructions under the Inland Revenue Act to ensure better and transparent management with regard to the provisions for anticipated losses of loans and doubtful loans in calculating taxes of banks and financial institutions,” PM Rajapaksa said. (Colombo/Nov18/2020)

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