There was a flood of queries and clarifications by the participants at the Taxation Seminar organized by the CA (Chartered Accountants) Sri Lanka Members' Benevolent Society in Colombo recently consequent to presentations by three Commissioners of Inland Revenue.
These queries were on tax exemptions consequent to amendments to the tax law based on the 2011 budget proposals and on the working of the Tax Appeals Commission established as an independent statutory institution again proposed in the budget to hear certain appeals against the imposition of any tax levy duty or charge by the Commissioner General of Inland Revenue.
Two Commissioners of Inland Revenue made presentations on budget proposals and on changes to the VAT Act. The queries by the participants who were high profile corporate sector personnel, were so extensive that the time of the seminar had to be extended by an hour and yet all the queries could not be answered at the forum but with an assurance that they would be answered later.
In fact due to the glut of queries one presenter had to cut short her presentation. This implied that these amendments to the tax law are apparently full of ambiguity and doubts.
One such query is about the position of the Board of Investments (BOI) in the present context and its legal stand. Some of the participants pointed out that there should be one central place to take decisions on tax exemptions, etc - either the Inland Revenue or BOI.
One of the panelists - N R Gajendran, Senior Partner, Gajma and Co commenting on the total concept of today's budget scenario while comparing it 25 years ago said that the saying goes that just after a couple is married they hug and the dog barks, but now the budget is like first the dog barks and then the couple hugs.
He said that there was plenty of excitement on the eve of presenting the budget in parliament 25 years ago and there were speculation that prices of commodities would go up and hoarding of goods by traders expecting the prices of those commodities would go up and there was the speculation of budget proposals leaking out, etc. But today there is no such excitement or anticipation, on the eve of the budget being presented in Parliament.
The first presenter, Ms Dhammika Gunatilaka, Commissioner of Inland Revenue said that exemption categories are SMEs, large scale enterprises, exemption of existing enterprises, specific import replacement enterprises and other concessions on certain conditions.
The SME sector comes under section 16C where the investment level is Rs 50 million. She said that for certain sectors the investment limit has been reduced to Rs 25 million. Ms Gunatilaka said that for exemptions coming under large scale enterprises under Section 17A the scope has been extended to cover processing and solid waste management.
In the case of exemption of existing enterprises, the minimum investment is Rs 50 million and qualifying payment - in four years of assessments subject to 24% of the investment for each year of assessment. She said that for new enterprises which involve strategic import replacement - a five year tax holiday followed by the concessionary income tax rate.
K.A.P. Kaluarachchi, Secretary to the Tax Appeal Commission and Deputy Commissioner General Inland Revenue speaking on the Tax Appeal Commission Act No.23 of 2011 said that the Commission is appointed by the Minister of Finance and Planning and any person who is aggrieved by the determination given by the Commissioner General of Inland Revenue (CGIR) relating to the imposition of tax, levy, duty or charge could appeal to the Commission.
He said that the person appealing is required to pay 25% of the sum assessed by CGIR. He said that the Commission has the power to confirm, reduce, or increase the assessment determined by CGIR or refer it back to the CGIR to review the assessment.
Ms B.A.D.D. Herath, Deputy Commissioner, Simplified VAT Unit, explained about the changes made to the VAT Act and Review of Simplified Value Added Tax Scheme and the changes made to the VAT Act No.14 of 2002 by the Budget 2012 |
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