The Finance Act was passed in Parliament on Tuesday (07 Sep), paving the way to legalize undisclosed assets.
Speaking to veteran journalist Faraz Shauketaly, Samagi Jana Balawegaya (SJB) MP Eran Wickramaratne explained that the bill actually an amnesty granted to those who haven’t paid taxes.
According to research, this has been done “13 times before” over a number of years from the 1960s, he added.
“This is generally done once in a lifetime in a country, that is if you have had some big social upheaval and social revolution or if you have displaced a dictator and you’re going into a democracy or some major political-social shift,” he stated.
“The intention for the action should be to raise higher revenue, bring those outside the tax system into the tax system and there’s a certain structural change that happens,” he noted.
If this is done repeatedly, it “definitely will not” have the impact of bringing in new money but allow those who have earned money through illegal and legal activities while having not paid taxes to “make black money white” or “if you have used undeclared money and purchased local or overseas assets, this is a way of legitimising it,” he added.
Individuals with such assets can go to the Inland Revenue Commissioner to make a declaration that the relevant individual had this income or asset while having not paid the taxes but wants to declare it and will only have to pay 1 percent to make it legal.
“The information is so secretive it can’t be shared with anyone else,” MP Wickramaratne noted.
He further said that this action encourages people not to pay their taxes, pointing out that this is unfair to the hard-working honest people of Sri Lanka.
Watch: Faraz on Tax Evasion
