Speaker receives copies of seven petitions filed in SC against proposed Finance Bill

By Saman Indrajith

Speaker Mahinda Yapa Abeywardena yesterday told Parliament that he had received copies of seven petitions that had been filed in the Supreme Court against certain provisions in the Finance Bill introduced by the government to grant amnesty to tax evaders.

The petitions had been submitted as per the provisions of the Article 121(1) of the Constitution, the Speaker announced at the commencement of sittings yesterday.

The petitioners claimed that the provisions of the draft were inconsistent with the constitution and would require the bill to be passed by a special majority in Parliament and by the people at a referendum.

The bill was presented to Parliament last week. Under the provisions of the proposed bill if a person fails to disclose the taxable assets and is willing to immediately invest the equivalent amount in the country, he or she can invest in other financial instruments such as purchase of shares of a resident company, treasury bills or treasury bonds issued by the Central Bank, debt securities issued by a resident company in Sri Lanka or buy any movable or immovable property in Sri Lanka. This section of the bill will come into effect on or after the date of commencement of this Act, but prior to December 31. On voluntary disclosure, a one per cent nominal tax would be payable.

In his SC petition, SJB MP Eran Wickramaratne noted that the bill granted full immunity, also referred to as a ‘tax amnesty’ from liability to pay any tax, penalty or interest, or from any investigation or prosecution. It noted that the sum to be collected as a ‘Tax on Voluntary Disclosure’ of 1% of the sum disclosed is far lower than the tax liability of the persons who have already paid tax in terms of applicable existing law.

The grant of the tax amnesty would legitimise fraud on revenue perpetrated by those to whom the amnesty is granted, the petitioner argued.