Ceylon Chamber prefers new revenue bill implemented from April, next year

Bill tabled in parliament on July 5, 2017

Once passed it’ll replace existing Inland Revenue Act 

Sri Lanka’s premier business chamber, the Ceylon Chamber of Commerce (CCC), yesterday said the new Inland Revenue Bill should ideally be implemented from April 1, next year, giving a longer transitional period for both the taxpayer and Inland Revenue Department to become fully conversant with the provisions of the law.

The bill, which was gazetted on June 16, 2017, was tabled in parliament on July 5, 2017. Once passed by parliament, the bill will replace the existing Inland Revenue Act No 10 of 2006. 
As indicated by the government, the objective of introducing a new revenue bill is to broaden the existing tax base, rationalize the existing tax structure, simplify the language and align the tax rules with the international best practice. 

The CCC said it engaged in the drafting stages of the bill and made several representations to the government on behalf of its members and the general taxpaying public without compromising the government’s effort of increasing revenue collection.  However, in an earlier statement in March, the CCC stressed the need to consult the country’s private sector before finalizing the proposed bill, which was originally scheduled to come into effect from April 1, this year. 

Some of the key submissions made by the CCC were to maintain the current law relating to taxing dividends, interest and the business of life insurance, sale of shares in the Colombo Stock Exchange, concessionary rate of tax for thrust industries such as agriculture, education and exports, 

simplify the capital allowances structure proposed in the new bill and maintain the same tax structure. 
“We are happy to note that most submissions were accepted whilst the chamber is yet negotiating with the government to accept certain provisions to do with the practical implementation of the proposed law,” the CCC said.

The International Monetary Fund (IMF), with which Sri Lanka currently has a US $ 1.5 billion Extended Fund Facility (EEF), is said to have extended its expertise in drafting the new bill. The IMF is yet to disburse the third tranche of the EEF, which was delayed until the new bill was tabled in parliament. 

Some quarters speculate that Sri Lanka’s new revenue bill is merely a copy of Ghana’s income tax laws, which the IMF helped drafting.   A rating agency recently said the bill would face little resistance in parliament.