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Tuesday, December 5, 2023

Tax amnesty reaps Rs. 4 bn in revenue – The Morning

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  • Taxes collected from 15 Sep 2021 to 31 March 2022

By Imesh Ranasinghe 

The Treasury has collected Rs. 4 billion from the tax amnesty granted last year for the voluntary disclosure of undisclosed income or assets at a 1% surcharge, revealed the Finance Ministry Annual Report for 2021.

Accordingly, the report disclosed that Rs. 175 million was collected under the tax amnesty between 15 September 2021, to 31 December 2021, and by its deadline on 31 March, a total amount of Rs. 4 billion was collected by the Treasury, meaning that at least Rs. 400 billion in undisclosed assets were declared in this manner in five-and-a-half months.

The Tax on Voluntary Disclosure (TVD) was introduced as an amendment under the Finance Act No. 18 of 2021 and was passed in Parliament on 15 September 2021, which provides to grant amnesty to those who disclose and invest undisclosed income or assets with the payment of the above tax at the rate of 1% of the investment.

This allowed the individuals who haven’t fully disclosed their income or assets to regularise their tax status and gain immunity from investigation, prosecution, and penalties they would have been subjected to otherwise.

The amnesty includes a range of taxes including value-added or betting levies that had not been paid or arrears for undisclosed income up to 30 March 2020, and the deadline given for individuals to declare any undisclosed assets expired on 31 March 2022.

When passing the Bill in Parliament, the Government expected to attract at least $ 500 million worth of monies to flow in, which could then be utilised to solve some of the problems it is currently facing.

However, the Government was only able to collect $ 13.6 million (exchange rate as of 31 March 2022).

In November last year, former Governor of Central Bank of Sri Lanka (CBSL) Ajith Nivard Cabraal stated that the amount of funds registered and revenue earned from the controversial tax amnesty was “confidential information”.

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