The Finance Ministry is to give a wide range of tax amnesties, including writing off penalties for those who failed to disclose any taxable income or assets by March last year, and allow others who are willing to invest the amount equivalent of the undisclosed tax in other financial instruments in the country, according to a new bill gazetted by the Finance Ministry.
Accordingly, if a person fails to disclose the taxable assets and is willing to immediately invest the equivalent amount in the country, he or she can invest in other financial instruments such as purchase shares of a resident company, treasury bills or treasury bonds issued by the Central Bank, debt securities issued by a resident company in Sri Lanka or buy any movable or immovable property in Sri Lanka.
This section of the bill will come into effect on or after the date of commencement of this Act but prior to December 31. On voluntary disclosure a one per cent nominal tax should be paid.
The bill was gazetted by the Finance Ministry this week, days after new Minister Basil Rajapaksa took office.
Under the Bill, the Commissioner General of Inland Revenue and the other officers in the Department should preserve ‘absolute secrecy’ of the declarant’s identity or the contents in the declaration. The provisions of the Inland Revenue Act on the requirement of maintaining officials secrecy including punishment will be applicable.
The bill also grants full immunity for declarants who paid the tax on voluntary disclosure from liability to pay any tax, penalty or interest or from any investigation or prosecution following the acknowledgment of the Commissioner-General of Inland Revenue Department.
The Commissioner-General is also empowered to write off the tax arrears of individuals whose assessable income, calculated in terms of the provisions of the Inland Revenue Act, No. 24 of 2017, for the year of assessment ending March 31, last year, provided they do not exceed three million rupees.
In my view CSE will be an attractive option for tax amnesty beneficiaries. This can give a boost to the market!