6-member committee to ‘interpret tax laws’
View(s):Sri Lanka’s Inland Revenue Department has appointed a 6-member committee to interpret the provisions of tax laws and regulations to clear any impediments in the implementation of such enactments, a senior IRD official said.
The move comes a week after the Business Tines reported that the Government was aiming to reactivate tax circulars with repercussions to offenders as there was a tendency to ignore or evade these taxes.
Tax revenue fell by Rs.1, 005.9 billion from the budgetary target of Rs.1,131 billion last year according to the Central Bank.
The aim is to streamline tax collection clearing any doubts of taxpayers, he said adding that the complex nature of some tax laws has warranted the IRD authorities to give the correct interpretation of these laws.
The committee will also issue necessary guidelines and instructions to ensure uniformity in the application of respective provisions, he disclosed.
Acts relating to Betting and Gaming Levy, Value Added tax, Economic Service Charge, Nation Building Tax, Stamp Duty Tax and several other tax laws are currently administered under the purview of the Commissioner General of Inland Revenue.
Another objective of the appointing of this committee is to prevent tax consultants from making use of the complex nature of tax laws to mislead their clients.
It ensures tax compliance blocking loop- holes in tax administration, the official said.
Taxpayers have been requested to send in writing their tax issues connecting any question of law to the committee for their clarification
But any request for interpretation on any matter or issue of a case pending before the tax appeal commission or any court will not be entertained by the committee, he said.
Chairperson of the committee is Ms. D.G.P.W. Gunasekera (Senior Tax Commissioner) while the members are M.G. Somachandra (Senior Commissioner), Ms. H.M.D. Munasinghe (Senior Commissioner), H.M.G. Wijesinghe (Senior Commissioner), Ms.B.A.D.D. Herath (Senior Commissioner) and A.A. Dayarathne (Senior Commissioner).Last month, the Inland Revenue Department (IRD) re-activated a 1994 circular on tax clearance certificates to banks and authorised dealers making this mandatory for communication services including telecommunication and Internet services, computer software and information services, royalties. License and franchise fees, remittances relating to foreign loans, capital repayment and interest payments as well as remittances for management services for persons outside Sri Lanka and remittances for service contracts including human resources and IT management.
Informed sources said that a special unit in the Treasury is now examining other tax circulars which have been ignored or not complied with by banks and other institutions.
‘The plan is to see whether we could enforce these properly and get more revenue,” one official said.
According to the IRD circular SEC/2014/02, Sri Lankan companies engaged in telecommunication and Internet services are required to furnish tax clearance certificates to make their procurements from foreign countries.
IT companies including BOI approved IT firms say that they will be severely impacted by this circular discouraging future investments in the island.