27 April 2023 04:32 am Views - 3824
With an aim to broaden the tax base by enabling electronic payments coupled with mandatory reporting for state institutions, the government plans to bring in fresh amendments to Inland Revenue Act, No.24 of 2017 in Parliament for approval this Friday.
Under the proposed amendments, Finance State Minister Ranjith Siyambalapitiya yesterday revealed that it would be made mandatory to submit the tax files of personal income taxpayers in electronic format.
“The new amendments will provide the necessary provisions to discourage cash transactions. So, we can calculate real taxes owed by taxpayers based on their electronic transactions.
If someone makes over Rs.500,000 worth of purchases on a daily basis, then the Inland Revenue Department (IRD) would not permit them to reduce the amount above Rs.500,000 from their expenses. Therefore, they will definitely have to follow an electronic payment method,” he said.
Although earlier it was not mandatory for state institutions such as the Motor Traffic Department and state banks to report their transactions to the IRD officially, the minister noted that once the proposed amendments are passed in Parliament, such state institutions, which perform large numbers of transactions with the public, would be required to report them to the IRD. In addition, the minister noted that the proposed amendments would also resolve the complications related to the withholding tax.
“It has become a big problem as agents have not been able to release interest incomes below Rs.100,000, which doesn’t fall under the withholding tax bracket, to depositors in an expedited manner. Under the proposed amendments, the withholding agents will be enabled to release such funds within a short period of time,” he added.