17 November 2022 12:18 am Views - 272
By Shabiya Ali Ahlam
Budget 2023 proposed the appointment of a tax ombudsman to boost the confidence of the taxpayers, which has been well received by tax experts, though concerns prevail in the implementation of the proposal.
KPMG Principal of Tax and Regulatory Division Suresh Perera said the government must not repeat the mistakes made in the past by having a tax ombudsman, for which it is essential to have the proper constitution in place for the appointed official to operate.
“When a tax ombudsman is being created, it should be by way as an Act of Parliament, defining his powers and the enforcement mechanisms. The shortfalls in the past should not be repeated,” said Perera addressing a post-budget webinar organised by the Institute of Certified Management Accountants of Sri Lanka.
Budget 2023 is not the first to introduce a tax ombudsman. A similar proposal was incorporated in the 2017 budget as well to improve the tax administration in the country.
However, the concept of a tax ombudsman was introduced in Sri Lanka in the 2004 national budget and appointed for the post was former High Court Judge Maxwell Paranagama. He was the first and only holder of the office. No appointments were made after his tenure of two years.
Despite the existence of a tax ombudsman, the official did not have the power to provide relief or enforce decisions, as the system lacked the necessary framework that gives the ombudsman legal enforceability.
To learn from the previous mistakes and be consistent with the administration’s efforts, Perera asserted the need for the government to be realistic with the implementation and address the shortfalls in the previous proposals, instead of repeating them. The merits of having a tax ombudsman are that the official would provide an expeditious, free and fair avenue for the taxpayers aggrieved by the actions of revenue officers to resolve their disputes.
The taxpayers could seek assistance from the ombudsman with regard to service, procedural and administrative tax matters. However, according to the statements made on the topic by Perera previously, the interpretation of technical tax matters would not be in the domain of the tax ombudsman. The availability of an opportunity to resolve matters amicably would ensure the avoidance of protracted litigation.