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| Wednesday, 17 March 2004 |
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'Income Tax Amnesty or baptism of fraud and crime?- part 2 Continued from yesterday Nihal Sri Ameresekere, F.C.A., F.C.M.A., Business & Management Consultant
The response from the Prime Minister, Ranil Wickramasinghe and his Cabinet of Ministers, notwithstanding having been put on notice of the gravity and immorality, was to extend the applicability of the Inland Revenue (Special Provisions) Act No. 10 of 2003 from the terminal date of June 30, 2003 upto August 31, 2003 by the Inland Revenue (Special Provisions) (Amendment) Act No. 31 of 2003, the Bill thereof being tabled in Parliament on July 25, 2003, after President Kumaratunga's Note to Cabinet of July 10, 2003 ! In the Statement filed on December 15, 2003 by the Secretary to the President, being a Respondent in a Writ Application in the Court of Appeal, the estimated write-off of dues to the State, as a consequence of the Inland Revenue (Special Provisions) Act No. 10 of 2003 had been given as Rs. 200 billion. Finance Minister K.N. Choksy, Secretary Finance, Charitha Ratwatte, the Commissioner General of Inland Revenue, Director General Customs, Commissioner General Excise, Controller of Imports & Exports, Controller of Exchange, Governor Central Bank and the Attorney General are also Respondents. The loss by way of write-off of Rs. 200 billion of monies due to the state, which are monies of the public, have not been disputed now for over 3 months by any one of these persons filing Affidavit in Court, nor has the correct figure been disclosed to Court and the public, as it ought to have been ! Such write-off of dues to the State i.e. the public, is not secret, since these are known dues being written-off and/or refunded, and which are contained in public records of the State ! This however does not include the unknown quantum of income tax on the undisclosed income and assets now secretly disclosed, which is another matter of a Tax Amnesty, as is internationally known !
Such 200 billion or the correct figure of write-off due to the State, which could easily be ascertained and disclosed, should be compared with the Rs. 3 billion grudgingly granted to the poor farmers as fertilizer subsidy, that too, consequent to a fast unto death by the farmers recently ! Also it should be compared with the Rs. 100 billion borrowed from the Aid Consortium, with much fanfare and rhetoric at the Japan Aid Consortium last year ! Should be also compared with the Education budget of Rs. 24 billion and the Health sector budget of Rs. 22 billion for 2004 ! How much would it have costed to have provided employment to the 30,000 unemployed graduates ? But Rs. 200 billion or the suppressed correct figure of dues to the State is written-off granting colossal bonanzas to and enriching a privileged few, and further impoverishing the poor masses, regardless of the fact that borrowings of the country increased by Rs. 194 billion in 2003, and a further Rs. 350 billion is to be borrowed in 2004 ! Prudent financial management to boot ! Finance Minister, Choksy's "scoffing" at President Kumaratunga's recent statement to the business community is only a betrayed reflection of the arrogant attitude with which public monies of the poor have been plundered or caused to be plundered ! Can Finance Minister Choksy deny a write-off of Rs. 1.2 billion to one party and Rs. 1.25 billion to another party for importing and/or selling goods violating BOI regulations ? Are not both foreign owned companies, who are expected to bring in foreign investments, and not be enriched by hand out of public funds by the State ?
Are there not other large write-offs of hundreds of millions of rupees each ? Does it lie in the teeth of Finance Minister Choksy to say that these are not collectable, when some of them have been successfully prosecuted by the State and are pending Appeal in the Court of Appeal and/or the Supreme Court ? Ought not Finance Minister Choksy, in conformity with Codes of Conduct for elected / selected public officers, disclose as to whether not some of his Clients and on whose behalf he had pleaded and disputed the payment of dues to the State, and where Courts of law have held against him, have now benefited from this dubious piece of law ? Finance Minister Choksy scoffingly states that all dues to the State are mere book entries ! Where does one record the dues to the State, except in books of accounts ? Are all these debts due to the State irrecoverable ? Has the Auditor General so certified or has not Finance Minister Choksy
abdicated his duties and responsibilities, as the Minister of Finance ?
Are not these dues to the State annually reviewed by the relevant State
Authorities and irrecoverable amounts recommended to be written-off ? If
so, are not these balance dues to the State deemed recoverable by the
relevant State Authorities ? Do companies write-off all the debts or give
opportunity for a debtor, who can pay, not to pay, in providing for
write-off of "bad debts" only ? One does not throw the baby with
the bath water ! Obviously, Choksy's fundamentals, both in finance and law
appear to be much wanting ! |
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