Financial Times

Tax net tightens against finance companies, depositors

By Bandula Sirimanna

The Inland Revenue Department is exploring the possibility of formulating a scheme to probe investments of depositors in finance companies who are evading the tax net and to collect taxes from them ‘fairly and courteously’.

A senior official of the department said that most of these depositors had made investments ranging from Rs.10 million to Rs. 100 million and over in finance companies, in most cases to avoid paying taxes. He added that at present there is no system to go through the documents of financial transactions in these companies and to find out the details of depositors to ascertain as to how these persons had earned such massive amounts of money and to ascertain whether there was black money involved in transactions.

He added that the Department of Inland Revenue and the Central Bank should work out modalities to obtain details of customers of finance companies to collect taxes from them by encouraging voluntary compliance.

He disclosed that while some finance companies are evading the payment of taxes, the Golden Key Credit Card Co. recently paid Rs. 41 million as taxes. The Department will probe the investments of the Golden Key depositors to ascertain whether there was 'black money' involved in the transactions.
The official said that Housing & Property Trades Ltd (HPT), a finance company which collapsed many years ago, also failed to pay taxes. The directors of the company were fined Rs 1.8 million by the Fort Magistrate, for violating Central Bank directives in 1998.

The Central Bank filed action against HPT for failure to honour directives issued by the Monetary Board under the Finance Companies Act No: 78 of 1988. It charged that HPT had failed to maintain liquid assets in approved securities to settle deposit liabilities to depositors and submit audited balance sheets. Thirty cases have been filed against the HPT directors — Dharmadasa Wijemanne (Chairman), Aruna Wijemanne, Dimuth Wijemanne, Deepal Dushmantha Wijemanne and P. A. Jayakuru by depositors.


 
Top to the page  |  E-mail  |  views[1]
 
Other Financial Times Articles
> US Embassy plans to move
> Tax net tightens against finance companies, depositors
> AEC to move out as listed company
> Captains’ won’t sell JKH anymore
> Airtel keeps potential subs guessing till Jan.12
> Seylan to reduce lending to Ceylinco
> Threats against the media - Comment
> What Obama’s win might undermine
> National tourism strategy of ‘waiting for better times to come’
> Solar energy only clear option for Sri Lanka independent of fossil fuels
> Lankan bankers offer free counselling for ‘struggling’ borrowers
> ISO status for Modern Pack Lanka
> Sri Lankan diaspora to provide more stable foreign funds
> Systemic issues impacting on banking and financial services
> Sri Lankan Innovator wins worldwide Fonterra CEO’s Award
> Ceylon Chamber condemns Sirasa/MTV attack
> Several undergraduates are children of plantation workers
> Ferntea to be liquidated
> Lionhart to buy more into ERI
> World Bank joins many in condemning Lasantha’s killing
> Vasu wants Ceylinco Group probed
> Details of dealings at Golden Key revealed in court
> A new world experience for Sri Lanka’s elite in agriculture
> Tigo reaches 2 million subscribers
> Harpic’s new product to help housewives
> Seylan Bank will curtail lending to Ceylinco Group
> Auspicious beginning of new year for tea sector
> Malaysian delegation meets FCCISL officials
> Atlas produces school uniforms

 

 
Reproduction of articles permitted when used without any alterations to contents and a link to the source page.
© Copyright 2008 | Wijeya Newspapers Ltd.Colombo. Sri Lanka. All Rights Reserved.| Site best viewed in IE ver 6.0 @ 1024 x 768 resolution