Financial Times

Tax dept. to probe Golden Key, depositors

By Bandula Sirimanna

The Inland Revenue Department (IRD) is to initiate investigations into Golden Key Credit (GK) Card Company tax files and its depositors who have not paid taxes on their interest earnings or had invested large sums of money seeking high interest rates, RD sources told The Sunday Times FT.

The Department wants to ascertain how some of the depositors had earned large sums of money and whether they had evaded the payment of taxes, in these investments. Finance companies normally deduct a 10% withholding tax on interest paid on deposits unless the depositor signs a declaration saying that his/her income was below a floor that entailed no tax liability. No withholding taxes are deducted on such declarations held by the companies concerned, the sources said.

The list of around 7,200 names of GK depositors has been handed over to the CID and AG’s Department and the investigations will be based on these available information. The Department, which has a copy of the list, is also probing the due tax payment of the Golden Key company amounting to nearly Rs.150 million of which Rs 73 million has been paid.

However, the sources said these investigations have been hampered to a great extent as a result of the recent LTTE airborne attack on the IRD building in Fort which has severely affected operations of the department. A senior official told The Sunday Times FT that only certain services are functioning at the IRD headquarters in Colombo and some of the other services are being carried out at regional offices in Colombo.

He said that important data containing vital information on tax matters and the computer system have not been destroyed or affected despite certain floors including the 12th floor being damaged following the Tigers' light aircraft crash. The Department is urging taxpayers to bear with them and also request them to cooperate by settling tax dues on time. The official said payments can be made at the Bank of Ceylon branch at the Head Office or other branches in Colombo while tax returns could be handed over at the counter at ground floor or at the Regional Inland Revenue Office at Jawatte. The issuing of identity card numbers and VAT tax numbers for taxpayers at the first floor will continue as usual, he said.

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