Business

Bill to whitewash undisclosed assets goes to Parliament

By Imsha Iqbal

A range of tax amnesties were tabled yesterday (20) by the Government to be enacted by the Parliament of Sri Lanka indemnifying those who voluntarily disclose any taxable income or asset against any investigation, prosecution, and penalty under the specified code of law.

The provisions that cover imposing the voluntary disclosure to any individual mentions that any taxable supply, income, or asset that was not disclosed and was necessary to be disclosed under the provisions of any law would be referred to as “undisclosed taxable supply, income, or asset”, with a value-added tax return for any taxable period ended on or prior to 31 March 2020, or a return of income for any year of assessment ended on or prior to 31 March 2020.

However, the Bill further notes that individuals who are under investigations or have ongoing legal proceedings in relation to any undisclosed taxable supply, income, or assets are not eligible for this amnesty. 

Also, a person who has been convicted, thus far, of an offence under the provisions of any law relating to undisclosed taxable income or assets and any amount of undisclosed taxable income or assets held by any person, would not be eligible to receive amnesty per the Tax Amnesty Bill.

When it comes to disclosing the undisclosed taxable supply, income, or asset, the person who has invested or deposited an undisclosed taxable asset and has paid the Tax on Voluntary Disclosure on or prior to 31 December 2021, can submit to the Tax on Voluntary Disclosure of undisclosed taxable income subject to the guidelines issued by the Commissioner General.

The Government approved a proposal on 6 July encouraging people to invest their undisclosed assets and income after settling a mere 1% of the said asset value as tax without being subjected to any investigation or prosecution, in a move to increase the State’s tax revenue.

This tax proposal was tabled by Prime Minister Mahinda Rajapaksa in his capacity as Minister of Finance at the time. It was published as a bill in the Government Gazette and thereafter presented to Parliament for approval yesterday (20).