The government will waive the full interest on outstanding income tax payments of defaulters who settle their dues within six months, Deputy Minister of Economic Development Nishantha Jayaweera told Parliament on Tuesday.
Opening the Second Reading debate on the Inland Revenue (Amendment) Bill, Jayaweera said the interest waiver had been written into the proposed amendments to encourage compliance and improve revenue collection. The bill, he said, was primarily aimed at simplifying the existing tax system and removing complexities and uncertainties identified in tax administration.
“The primary objective of this Bill is to remove complexities in the existing tax system. Another objective is to eliminate uncertainties identified in tax administration. The aim is to simplify the tax system,” the Deputy Minister said.
The government’s broader strategy, Jayaweera said, was to increase State revenue by expanding the tax base rather than imposing additional taxes or raising existing rates — extending an argument he himself made in May when denying any VAT hike was on the table, and one President Anura Kumara Dissanayake echoed at his Inland Revenue Department arrears meeting earlier this month.
The amendments are also intended to give legal effect to Budget proposals and strengthen the administration of the inland revenue system. “The main purpose is to give legal effect to the Budget proposals and amend the law accordingly,” Jayaweera added.
Parliament passed the bill on Tuesday after a House debate, with opposition amendments to extend the penalty-collection window from 30 days to 90 days rejected. The Supreme Court had earlier found Clause 34 of the bill to be unconstitutional and required amendment in line with its determination — changes that were incorporated at committee stage.
Source: The Island.
