Financial Times

Invisible hand behind Tax Dept. changes

By Bandula Sirimanna

The Inland Revenue Department (IRD)’s administration could come to a standstill tomorrow if the appointed, new Commissioner-General K.T. Chitrasiri doesn’t assume office, a senior IRD official said.
Appeal Court Judge Chithrasiri who has been appointed as the new tax chief told The Sunday Times FT on Friday (May 1) that he is yet to receive his letter of appointment. His appointment has been approved by the Cabinet.

The uncertainty arose after Tax Chief S. Angammana officially left the department on Thursday (April 30) after being appointed Director-General (Revenue) of the Finance Ministry.

According to section 208 of the Inland Revenue Act No 10 of 2006, the Commissioner-General should delegate his administrative powers to Senior Deputy Commissioners and other officers including assessors for the smooth functioning of revenue collection and related matters, the senior official said. He added that the normal practice was the issuing of letters delegating powers to Senior Deputy Commissioners under the signature of the new Commissioner-General soon after his assumption of office, and if doesn’t happen, work will come to a standstill.

Meanwhile IRD and other sources say behind-the-scene moves initiated by former Treasury Secretary Dr. P.B. Jayasundera led to the sudden changes at the department last week.

Mr Angammana was sent back to the Finance Ministry – where he served earlier - while Justice Chitrasiri’s appointment is the first time an outsider is taking up this post. IRD sources said Mr. Angamana’s sudden removal was believed to be due to disagreements with two ministers over tax issues and the action of ‘an invincible hand (Dr Jayasundera)’. It it learnt that Mr. Angammana had expressed his disagreement to a suggestion made to write off default tax of corporations and government institutions, the action taken to reduce VAT from 15% to 12% as well as to increase the National Defence levy from 1% to 3%.

The reduction of VAT has caused a considerable loss of revenue to the government and this was brought to the notice of the authorities by the tax chief. Mr. Angammana was not available for comment. The Sunday Times FT reliably understands that a senior IRD officer and some other officials who were close associates of A. Wijepala, another former Tax Chief who was implicated in the VAT scam, had sought the assistance of Dr. Jayasundara who is serving as an unofficial Presidential Advisor and is based at Temple Trees, to work out a plan to change the IRD hiararchy.

Dr Jayasundera could not be reached for comment as he was away in China. Dr Jayasundera resigned from his post – on being called upon by the Supreme Court - after being found guilty by the court in the LMS case of concealing facts to the Cabinet and being party to a corrupt deal. He was ordered to pay compensation of Rs 500,000 to the state.

The former Treasury Secretary was criticised by the court for continuing to hold public office after the judgment, forcing him to step down. The court said he should not hold any form of public office.

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