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Govt willing to amend Bill before passage in House: AG’s Dept
The Attorney General’s (AG) Dept informed the Supreme Court (SC) on Friday that the Govt is willing to make several amendments to the proposed Inland Revenue Bill (IRB), before it is passed by Parliament.
Ten Petitions have been filed in the SC, challenging the constitutionality of the Bill presented to Parliament on July 5. It provides for the imposition of Income Tax for any year of assessment commencing on or after April 1, 2017.
The Bench comprises Chief Justice Piyasath Dep and Justices Anil Gooneratne and Nalin Perera.
Additional Solicitor General (ASG) Farzana Jameel who appeared on behalf of the AGs Dept, told Court that the Bill has been drafted in a manner without eroding any basic principles of good governance or arbitrariness that violates the sovereignty of the people. She said the new Bill is a “complete departure from the existing taxation system” in place.
“The new law was drafted in a way to ensure transparency and simplification of an effective and efficient taxation system that has been complicated due to several amendments and clauses introduced to previous Acts. As a result, there are so many litigations that emerged and taxpayers find it difficult to contribute to Govt’s taxation system” she said.
Acknowledging that some concessions granted under existing laws have been removed and new clauses included, with proper checks and balances in place, the ASG alleged petitioners tried to portray those omissions are on an arbitrary and discriminatory basis, and even going further, claiming, it violates the fundamental rights entrenched in several Articles in the Constitution.
Indicating that redrafting tax laws were one of the main Budget proposals of National Budget 2016, which was passed in Parliament, she argued Govt is entitled to formulate its policies to handle public finance and it can’t be interpreted as violation of people’s sovereignty.
“Existing tax laws in the country are cumbersome, complex and based on traditional British concepts. The complexity of the tax laws has been identified as an impediment to the effective implementation of tax policy in Sri Lanka. It has led to various complications, thereby hampering the effective implementation of the tax policy. Therefore, we need to redraft the tax laws to bring about necessary improvements to the legal framework to ensure clarity, consistency and simplicity towards reflecting the features of modern tax systems which will help taxpayers understand the system easily and eliminate loopholes that have been created by the ambiguities in laws, while strengthening tax administration,” the court was told of the proposal in the National Budget of 2017, detailing the need for tax regulations.
Delivering her submission, the Counsel Jameel told Court the new Bill has been formulated after careful study of the present Inland Revenue Act and changes brought in to strengthen tax collection and compliance of taxpayers and tax practitioners.
Along with the ASG, Senior Deputy Solicitor General Arjuna Obeysekere, State Counsel Suren Gnanaraj, Kanishka de Silva, Chaya Sri Namuni and Hashini Opatha appeared for the AG’s Dept and the Finance Minister.
Sanjeeva Jayawardena P.C., appearing on behalf of five unions of the Inland Revenue Service, raised doubts on ambiguity and apathy in the impugned Bill, and stressed it would open passage for siphoning classified information of taxpayers to ministers or outsiders, removing the confidentiality and secrecy of classified and sensitive information about taxpayers, which had been privy only to the Dept itself.
He said that as a result of this IRB, there will be a serious undermining of tax officials’ authority and diminution of their status as both specialised and trained officers of the Dept as public officers, and the Bill, by introducing a new illegal concept of a “tax official,” would result in serious inroads to their powers, duties and functions, and render them effectively subservient to this so-called curious category of “tax officials”.
Responding to this submission, the ASG told Court that the definition of the word “Tax officials” would be amended at the Committee Stage of Parliament, as it is understood as broad and wide.
He said that, in the case of a public ruling by the Commissioner General, there is no provision for him to have recourse to a committee of senior officers of the Dept, unlike in the present Act, and it was urged that it should be introduced. The ASG responded there will be a mechanism in place for remedial options, if a taxpayer wants to complain against a ruling served.
Further hearings will take place tomorrow.