Alphabetical List of Statutes
Finance Act – 2015
FINANCE ACT – 2015
Arrangement of Sections
1. Short title.
PART I
BARS AND TAVERNS LEVY
2. Imposition of the Bars and Taverns Levy.
3. Default in payment of the levy.
4. Recovery of the levy in default.
5. Interpretation.
PART II
CASINO INDUSTRY LEVY
6. Imposition of the Casino Industry Levy.
7. Default in payment of the levy.
8. Recovery of the levy in default.
9. Interpretation.
PART III
SUPER GAIN TAX
10. Imposition of the Super Gain Tax.
11. Default in payment of the tax.
12. Interpretation.
PART IV
MOBILE TELEPHONE OPERATOR LEVY
13. Imposition of Mobile Telephone Operator Levy.
14. Default in payment of the levy.
15. Recovery of the levy in default.
16. Interpretation.
PART V
SATELLITE LOCATION LEVY
17. Imposition of the Satellite Location Levy.
18. Default in payment of the levy.
19. Recovery of the levy in default.
20. Interpretation.
PART VI
DEDICATED SPORTS CHANNEL LEVY
21. Imposition of the Dedicated Sports Channel Levy.
22. Default in payment of the levy.
23. Recovery of the levy in default.
24. Interpretation.
PART VII
[REPEALED]
PART VIII
MIGRATING TAX
28. Imposition of the Migrating Tax.
29. Interpretation.
PART IX
[REPEALED]
PART X
GENERAL
34. Default by bodies of persons.
35. Regulations.
36. Sinhala text to prevail in case of inconsistency.
SCHEDULE
10 of 2015,
35 of 2018.
An Act to provide for the imposition of Bars and Taverns Levy, Casino Industry Levy, Super Gain Tax, Mobile Telephone Operator Levy, Satellite Location Levy, Dedicated Sports Channel Levy, Mansion Tax, Migrating Tax And Motor Vehicle Importers Licence Fee and to provide for matters connected therewith and incidental thereto.
[Date of Commencement: 30th October, 2015]
1. Short title.
This Act may be cited as the Finance Act.
PART I
BARS AND TAVERNS LEVY
2. Imposition of the Bars and Taverns Levy.
(1) There shall be levied, from every holder of a licence specified in the Schedule to this Act, issued under the Excise Ordinance (Chapter 52), who held such licence as at March 31, 2015, a levy to be called Bars and Taverns Levy (hereinafter in this Part referred to as “the levy”) of rupees two hundred and fifty thousand.
(2) Where a holder of a licence referred to in subsection (1), held more than one licence specified in the Schedule, he shall be liable to pay the levy in respect of every such licence.
(3) The levy shall be paid on or before November 15, 2015.
(4) The levy shall be collected by the Commissioner General and shall be remitted to the Consolidated Fund within fifteen days from the date of collection.
3. Default in payment of the levy.
(1) Any holder of a licence who fails to pay the levy as provided for in section 2, shall be deemed to be a defaulter under this Act.
(2) The provisions of section 4 shall apply to and in relation to the prosecution against any such defaulter and for the recovery of such levy.
4. Recovery of the levy in default.
(1) Where the amount of the levy or part thereof is in default, the Commissioner General shall issue a certificate containing particulars of the amount in default and the name and address of the last known place of residence or business of the defaulter to the Magistrate having jurisdiction over such place.
(2) The Magistrate shall thereupon summon the defaulter to show cause why proceedings for the recovery of the amount of the levy in default should not be taken against him.
(3) If sufficient cause is not shown by the defaulter, the amount of the levy in default shall by Order of the Magistrate be recovered as if it was a fine imposed by the Magistrate on such defaulter and shall when recovered, be remitted to the Commissioner General to be credited to the Consolidated Fund.
(4) In addition to the fine imposed under subsection (3), the licence issued to the relevant defaulter under Excise Ordinance (Chapter 52), may be cancelled by the Commissioner General with effect from December 31, 2015.
5. Interpretation.
In this Part of this Act, unless the context otherwise requires—
Commissioner General” means the Commissioner General of Excise appointed under section 7 of the Excise Ordinance (Chapter 52).
PART II
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Finance Act – 2018
FINANCE ACT – 2018
Arrangement of Sections
1. Short title.
PART I
AMENDMENT OF PART II OF THE FINANCE ACT, NO. 25 OF 2003
2. Amendment of section 11 of Act, No. 25 of 2003.
3. Amendment of section 12 of the principal enactment.
PART II
AMENDMENT OF PART II OF THE FINANCE ACT, NO. 5 OF 2005
4. Amendment of section 7 of Act, No. 5 of 2005.
PART III
AMENDMENT OF PART III OF THE FINANCE ACT, NO. 5 OF 2005
5. Amendment of section 13 of Act, No. 5 of 2005.
6. Amendment of section 13A of the principal enactment.
7. Retrospective effect.
PART IV
AMENDMENT OF PART IV OF THE FINANCE ACT, NO. 12 OF 2012
8. Amendment of section 18A of Act, No. 12 of 2012.
9. Amendment of the Schedule to the principal enactment.
10. Application of the provisions of this Part.
PART V
AMENDMENT OF PART II OF THE FINANCE ACT, NO. 16 OF 1995
11. Amendment of section 3 of Act, No. 16 of 1995.
12. Amendment of section 4 of the principal enactment.
13. Amendment of section 5 of the principal enactment.
14. Amendment of section 8 of the principal enactment.
15. Amendment of section 8A of the principal enactment.
16. Insertion of new section 8B in the principal enactment.
PART VI
AMENDMENT OF THE FINANCE ACT, NO. 10 OF 2015
17. Repeal of Part VII of Act, No. 10 of 2015.
18. Repeal of Part IX of the principal enactment.
PART VII
IMPOSITION OF LUXURY TAX ON MOTOR VEHICLES
19. Imposition of Luxury Tax on motor vehicles.
20. Collection of tax at the time of importation.
21. Collection of tax at the time of registration.
22. Certain vehicles to be exempted from the payment of the tax.
23. Interpretation.
PART VIII
IMPOSITION OF Vehicle Entitlement levy
24. Imposition of Vehicle Entitlement Levy.
25. Collecting the levy for the period commencing from January 1, 2016 to January 1, 2019.
26. Collecting the levy for any period commencing on or after January 1, 2019.
27. Certain vehicles to be exempted from the payment of the levy.
28. Validation.
29. Amendment of the rates of the levy by resolution of Parliament.
30. Interpretation.
PART IX
ANNUAL COMPANY REGISTRATION LEVY
31. Imposition of Annual Company Registration Levy.
32. Certain companies to be exempted from payment of the levy.
33. Default in payment of the levy.
34. Recovery of the levy in default.
35. Validation.
PART X
DEBT REPAYMENT LEVY
36. Imposition of Debt Repayment Levy.
37. Exemption from the default in payment of the levy.
38. Default in payment of the levy.
39. Interpretation.
PART XI
CARBON TAX
40. Imposition of Carbon Tax.
41. Registered owner to pay the tax.
42. Amendment of the rates of the tax by resolution of Parliament.
43. Interpretation.
PART XII
CELLULAR TOWER LEVY
44. Imposition of Cellular Tower Levy.
45. Default in payment of the levy.
46. Recovery of the levy in default.
47. Interpretation.
PART XIII
IMPOSITION OF LEVY ON MOBILE SHORT MESSAGE SERVICES
48. Imposition of levy on mobile short message services.
49. Interpretation.
PART XIV
GENERAL
50. Default by body of persons.
51. Regulations.
52. Sinhala text to prevail in case of inconsistency.
SCHEDULES
35 of 2018,
21 of 2019,
2 of 2020.
AN ACT to amend the Finance Act, No. 25 of 2003, the Finance Act, No. 5 of 2005, the Finance Act, No. 12 of 2012, the Finance Act, No. 16 of 1995, and the Finance Act, No. 10 of 2015; and to provide for the imposition of Luxury Tax on Motor Vehicles, Vehicle Entitlement Levy, Annual Company Registration Levy, Debt Repayment Levy, Carbon Tax, Cellular Tower Levy and Mobile Short Message Service Levy; and to provide for matters connected therewith and incidental thereto.
[Date of Commencement: 2nd November 2018]
1. Short title.
This Act may be cited as the Finance Act, No. 35 of 2018.
PART I
AMENDMENT OF PART II OF THE FINANCE ACT, NO. 25 OF 2003
2. Amendment of section 11 of Act, No. 25 of 2003.
Part II (Imposition of Tourism Development Levy) of the Finance Act, No. 25 of 2003 (hereinafter in this Part referred to as the “principal enactment”) is hereby amended in section 11—
(1) by the renumbering of section 11 as subsection (1) thereof;
(2) in the second proviso of renumbered subsection (1) by the substitution for the words “rupees three million” of the words “rupees three million, for the period ending on December 31, 2018.”;
(3) by the insertion immediately after the second proviso to that subsection of the following new proviso—
“Provided further, from and after January 1, 2019, such levy shall be charged from any institution having an annual turnover of not exceeding rupees twelve million or a quarterly turnover not exceeding rupees three million at the rate of 0.5 per centum on such turnover of such institution.”;
(4) by the insertion immediately after renumbered subsection (1), of the following new subsection—
“(2) From and after January 1, 2019, there shall be levied from every institution licensed under the Tourism Act, No. 38 of 2005 a levy of one per centum on the turnover of such institutions in any year, to be called the Tourism Development Levy:
Provided however, such levy shall not be charged on the commission carried on the sale of airline tickets from Travel Agents including General Sales Agents licensed under the Tourism Act, No. 38 of 2005:
Provided further, such levy shall be charged from any institution having an annual turnover of not exceeding rupees twelve million or a quarterly turnover not exceeding three million, at the rate of 0.5 per centum on such turnover of such institution.”; and
(5) by the repeal of the marginal note of that section and the substitution therefor of the following—
“Imposition of Levy on institutions, licensed under Tourism Development Act and Tourism Act”.
3. Amendment of section 12 of the principal enactment.
Section 12 of the principal enactment is hereby amended by the repeal of subsection (2) thereof and the substitution therefor, of the following subsections—
“(2) The Director General of the Ceylon Tourist Board shall—
(a) retain the levy so collected under subsection (1), other than the levy collected from the online travel agents licensed under the Tourism Act, No. 38 of 2005 and the levy collected at the rate of 0.5 per centum under section 11; and
(b) remit the levy collected from the online travel agents licensed under the Tourism Act, No. 38 of 2005 and the levy collected at the rate of 0.5 per centum under section 11, to the Consolidated Fund.
(3) The Director General of the Ceylon Tourist Board shall furnish such returns in such manner as may be prescribed in that behalf to the Deputy Secretary to the Treasury, within thirty days of the date on which such amount is collected.”.
PART II
AMENDMENT OF PART II OF THE FINANCE ACT, NO. 5 OF 2005
4. Amendment of section 7 of Act, No. 5 of 2005.
Part II (Imposition of Share Transaction Levy) of the Finance Act, No. 5 of 2005, is hereby amended in section 7 thereof, by the repeal of paragraph (b) thereof and the substitution therefor of the following paragraphs—
“(b) for any period commencing on or after January 1, 2011, but prior to January 1, 2016, at the rate of 0.3 per centum; and
(c) for any period commencing on or after April 1, 2016, at the rate of 0.3 per centum,”.
PART III
AMENDMENT OF PART III OF THE FINANCE ACT, NO. 5 OF 2005
5. Amendment of section 13 of Act, No. 5 of 2005.
Part III (Imposition of Construction Industry Guarantee Fund Levy) of the Finance Act, No. 5 of 2005 (hereinafter in this Part referred to as the “principal enactment”) is hereby amended in subsection (1) of section 13, by the substitution for the words “for every year thereafter,” of the words and figures “for every year thereafter until December 31, 2015,”.
6. Amendment of section 13A of the principal enactment.
Section 13A of the principal enactment is hereby amended in subsection (1), by the substitution for the words and figures “any payment on or after April 1, 2009 to any construction contractor or sub-contractor,” of the words and figures “any payment on or after April 1, 2009 but prior to January 1, 2016 to any construction contractor or sub-contractor,”.
7. Retrospective effect.
The amendments made to the principal enactment by this Part of this Act, shall be deemed for all purposes to have come into force on January 1, 2016.
PART IV
AMENDMENT OF PART IV OF THE FINANCE ACT, NO. 12 OF 2012
8. Amendment of section 18A of Act, No. 12 of 2012.
Part IV (Exemption from Application of the provisions of Customs Ordinance (Chapter 235), Exchange Control Act (Chapter 423) and the Imports and Exports (Control) Act, No. 1 of 1969) of the Finance Act, No. 12 of 2012, (hereinafter in this Part referred to as the “principal enactment”) is hereby amended in subsection (1) of section 18A thereof, by the substitution for the words “any enterprise engaged in” of the words “enterprises or certain enterprises as specified in that Schedule engaged in”.
9. Amendment of the Schedule to the principal enactment.
The Schedule to the principal enactment is hereby amended, by the substitution for item 1 thereof, of the following item—
“1. Value Added Tax Act, No. 14 of 2002 (other than an enterprise which carries out activities which are treated as zero rated activities within the meaning of the provisions of Value Added Tax Act and for which the provisions of paragraph (e) of subsection (2) of section 2 of the said Act are applicable on local purchase of goods or services under Simplified Value Added Tax Scheme referred to in that paragraph);”.
10. Application of the provisions of this Part.
The amendments made to the principal enactment by this Part of this Act shall come into operation on the date of commencement of this Act.
PART V
AMENDMENT OF PART II OF THE FINANCE ACT, NO. 16 OF 1995
11. Amendment of section 3 of Act, No. 16 of 1995.
The Finance Act, No. 16 of 1995 (hereinafter in this Part, referred to as the “principal enactment”) is hereby amended in subsection (1) of section 3 thereof, by the substitution for the words “every luxury motor vehicle (other than a semi-luxury dual purpose motor vehicle or a wagon)—” of the words and figures “every luxury motor vehicle (other than a semi-luxury dual purpose motor vehicle or a wagon) of which the first year of registration falls prior to January 1, 2019—”.
12. Amendment of section 4 of the principal enactment.
Section 4 of the principal enactment is hereby amended in subsection (1) thereof, by the substitution for the words “every semi-luxury motor vehicle (other than a semi-luxury dual purpose motor vehicle or a wagon)—” of the words and figures “every semi-luxury motor vehicle (other than a semi-luxury dual purpose motor vehicle or a wagon) of which the first year of registration falls prior to January 1, 2019—”.
13. Amendment of section 5 of the principal enactment.
Section 5 of the principal enactment is hereby amended in subsection (1) thereof, by the substitution for the words “every semi-luxury dual purpose motor vehicle (other than a wagon)—” of the words and figures “every semi-luxury dual purpose motor vehicle (other than a wagon) of which the first year of registration falls prior to January 1, 2019—”.
14. Amendment of section 8 of the principal enactment.
Section 8 of the principal enactment is hereby amended in subsection (1) thereof, by the substitution for the words “any specified motor vehicle” of the words and figures “any specified motor vehicle, of which the payment due date of the levy falls prior to January 1, 2019,”.
15. Amendment of section 8A of the principal enactment.
Section 8A of the principal enactment is hereby amended by the substitution for the words “any specified motor vehicle” of the words and figures “any specified motor vehicle, of which the payment due date of the levy falls prior to January 1, 2019,”.
16. Insertion of new section 8B in the principal enactment.
The following new section is hereby inserted immediately after section 8A and shall have effect as section 8B of the principal enactment—
8B. Levy to be collected at the time of renewal of registration.
(1) Every Divisional Secretary who renews an annual revenue licence in respect of any specified motor vehicle of which the payment due date of the levy falls on or after January 1, 2019, shall, at the time of renewing the annual revenue licence, collect from the registered owner of such motor vehicle an amount equal to such levy and remit the amount so collected to the Commissioner-General who shall credit the same to the Consolidated Fund.
(2) Every Divisional Secretary who collects the levy under subsection (1) shall send a monthly report to the Commissioner-General in such form and containing such particulars as may be specified by the Commissioner-General in respect of the levy so collected and remitted to the Consolidated Fund.
(3) Every Divisional Secretary who collects the levy in accordance with the provisions of subsection (1), shall duly acknowledge the receipt of the levy so collected, in such manner as may be specified by the Commissioner-General.
(4) Any levy so collected by any Divisional Secretary in accordance with the provisions of subsection (1), shall be deemed to have been paid by such registered owner to the Commissioner-General on the date on which such Divisional Secretary collected such levy.”.
PART VI
AMENDMENT OF THE FINANCE ACT, NO. 10 OF 2015
17. Repeal of Part VII of Act, No. 10 of 2015.
Part VII (Mansion Tax) of the Finance Act, No. 10 of 2015 (hereinafter in this Part referred to as the “principal enactment”) is hereby repealed.
18. Repeal of Part IX of the principal enactment.
Part IX (Motor Vehicle Importers Licence Fee) of the principal enactment is hereby repealed, with effect from January 1, 2016.
PART VII
IMPOSITION OF LUXURY TAX ON MOTOR VEHICLES
19. Imposition of Luxury Tax on motor vehicles.
There shall be charged, a tax to be called the “Luxury Tax” (hereinafter in this Part referred to as “the tax”) on every specified motor vehicle of which the first year of registration falls on or after the date, and at the rates, as may be prescribed by regulations made under this Act.
20. Collection of tax at the time of importation.
(1) The tax payable under section 19 on any specified motor vehicle imported into Sri Lanka on or after the date prescribed under section 19, shall be paid to the Director-General of Customs, by the person importing such vehicle, at the time of removing the vehicle from Sri Lanka Customs, together with the import duties payable in respect of such vehicle in terms of any written law.
(2) The provisions of the Customs Ordinance (Chapter 235) applicable for the collection and recovery of any customs duty, shall, mutatis mutandis, apply for the collection and recovery of the tax under this section.
21. Collection of tax at the time of registration.
(1) The tax payable under section 19 on any specified motor vehicle imported into Sri Lanka prior to the date prescribed under section 19, or assembled in Sri Lanka shall be paid by the registered owner of such vehicle to the Commissioner-General at the time of issuing the first Certificate of Registration in respect of such vehicle.
(2) The Commissioner-General shall remit the tax collected under subsection (1) to the Consolidated Fund.
22. Certain vehicles to be exempted from the payment of the tax.
Nothing in this Part shall apply to any specified motor vehicle providing services to a Diplomatic Mission of any State within the meaning of the Diplomatic Privileges Act, No. 9 of 1996 or to an International, Multilateral or Bilateral Organisation recognised in terms of that Act.
23. Interpretation.
In this Part of this Act, unless the context otherwise requires—
“Commissioner-General” means the Commissioner-General of Motor Traffic appointed under the Motor Traffic Act (Chapter 203);
“Director-General of Customs” means the Director-General of Customs appointed under section 2 of the Customs Ordinance (Chapter 235);
“specified motor vehicle”—
(a) in relation to a vehicle of which the first registration falls prior to November 1, 2019, means any assembled or unassembled diesel motor vehicle of which the cylinder capacity exceeds 2,300 CC or a petrol motor vehicle of which the cylinder capacity exceeds 1,800 CC or an electric vehicle of which motor power of the engine exceeds 200 Kw, but shall not include a dual purpose petrol motor vehicle of which the cylinder capacity does not exceed 2,200 CC, a dual purpose electric motor vehicle, a van, a single cab or a wagon;
(b) in relation to a vehicle of which the first registration falls on or after November 1, 2019, means any assembled or unassembled motor vehicle, but does not include a van, a single cab, a double cab, a motor cycle, a motor tricycle, a motor ambulance, a motor hearse, a lorry, a tractor, a hand tractor, a trailer or any motor vehicle for transport of goods, as identified under the harmonised commodity description and coding system numbers provided in terms of the Customs Ordinance (Chapter 235).
[S 23 am by s 2 of Act 21 of 2019.]
PART VIII
IMPOSITION OF VEHICLE ENTITLEMENT LEVY
24. Imposition of Vehicle Entitlement Levy.
There shall be charged with effect from January 1, 2016, a levy to be called the “Vehicle Entitlement Levy” (hereinafter in this Part referred to as “the levy”) from every importer of motor vehicles, who imports a motor vehicle specified in the First Schedule hereto, at the respective rates set out in that Schedule for each category of vehicle identified under the harmonised commodity description and coding system numbers:
Provided however, an importer of vehicle who imports such vehicle in unassembled form shall not be liable to pay the levy.
25. Collecting the levy for the period commencing from January 1, 2016 to January 1, 2019.
(1) The levy payable for any period commencing on January 1, 2016 but ending prior to January 1, 2019 shall have been collected by the bank at which the Letter of Credit in respect of the vehicle imported is opened, at the time of opening such Letter of Credit and shall be remitted in the manner specified in subsection (2) by such bank to the Commissioner-General.
(2) The levy collected by the bank within the period commencing—
(a) on the 1st day of any month to the 15th day of that month shall have been remitted on or before the end of that month; and
(b) on the 16th day of any month to the end of that month shall have been remitted on or before the 15th day of the succeeding month,
to the Commissioner-General.
(3) Every bank which remit the levy in terms of the preceding provisions of this section shall, submit a statement setting out the following, to the Commissioner-General—
(a) the name and address of each importer relating to each remittance;
(b) category of the vehicle;
(c) value of the Letter of Credit;
(d) amount collected; and
(e) any other details as may be required by the Commissioner-General, from time to time.
(4) Any bank which collects the levy from any importer shall issue a copy of the Letter of Credit to such importer certifying that the levy has been paid. Any vehicle imported on a Letter of Credit opened on or after January 1, 2016 shall not be allowed to be removed from the Sri Lanka Customs, unless the importer submits the copy of the Letter of Credit which is endorsed by the bank.
(5) In any event where the Letter of Credit is cancelled and a refund being requested by the importer who has paid the levy on such Letter of Credit, prior to the remittance of such levy to the Commissioner-General, the bank may refund the levy so paid.
26. Collecting the levy for any period commencing on or after January 1, 2019.
(1) The levy payable under section 24 for any period commencing on or after January 1, 2019, on any vehicle in respect of which the Letter of Credit has been opened on or after January 1, 2019 and imported into Sri Lanka, shall be paid by the importer of the vehicle to the Director-General of Customs, at the time of removing the vehicle from Sri Lanka Customs together with the import duties payable in respect of such vehicle in terms of any written law.
(2) Upon payment of the levy, the Director-General of Customs shall issue a certificate called “Vehicle Entitlement Certificate” in the form as may be prescribed, by regulations made under this Act.
(3) The provisions of the Customs Ordinance (Chapter 235) which apply for the collection and recovery of any customs duty, shall, mutatis mutandis, apply for the collection and recovery of the levy under this Part.
27. Certain vehicles to be exempted from the payment of the levy.
Nothing in this Part shall apply to any vehicle imported to Sri Lanka for providing services to a Diplomatic Mission of any State within the meaning of the Diplomatic Privileges Act, No. 9 of 1996 or to an International, Multilateral or Bilateral organisation recognised in terms of that Act.
28. Validation.
Where a levy of such amount under section 24 has been collected by a bank on behalf of the Commissioner-General, in terms of this Part of this Act, during the period commencing on January 1, 2016, and ending on the date of the commencement of this Act, from any person who imports a motor vehicle, such collection shall be deemed for all purposes to have been, validly made, and the bank and the Commissioner-General are hereby indemnified against all action civil or criminal, in respect of such collection.
29. Amendment of the rates of the levy by resolution of Parliament.
The Parliament may by resolution amend the rates of the levy payable under section 24 and set out in the First Schedule hereto.
30. Interpretation.
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Finance Act – 2019
FINANCE ACT – 2019
Arrangement of Sections
1. Short title.
PART I
Amendment of Part VII of the Finance Act, No. 35 of 2018
2. Amendment of section 23 of Act, No. 35 of 2018.
PART II
Amendment of Part XI of the Finance Act, No. 35 of 2018
3. Amendment of section 40 of Act, No. 35 of 2018.
4. Amendment of section 41 of the principal enactment.
PART III
Amendment of Part XII of the Finance Act, No. 35 of 2018
5. Replacement of section 46 of Act, No. 35 of 2018.
6. Date of operation of this Part.
7. Imposition of a levy on foreign commercial transactions.
8. Exemption from the payment of the levy.
9. Default in payment of the levy.
10. Interpretation.
PART V
General
11. Regulations.
12. Sinhala text to prevail in case of inconsistency.
21 of 2019.
An Act to amend the Finance Act, No. 35 of 2018; to provide for the imposition of a foreign commercial transactions levy; and to provide for the matters connected therewith and incidental thereto.
[Date of Commencement: 1st November, 2019]
1. Short title.
This Act may be cited as the Finance Act.
part I
Amendment of Part VII of
the Finance Act, No. 35 of 2018
2. Amendment of section 23 of Act, No. 35 of 2018.
Section 23 of the Finance Act, No. 35 of 2018 is hereby amended by the substitution for the definition of the expression “specified motor vehicle” of the following definition—
“ “specified motor vehicle”—
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Finance Act – 2021
Finance Act – 2021
Arrangement of Sections
1. Short title.
PART I
Imposing the Tax on Voluntary Disclosure
2. Persons to whom this Part applies.
3. Undisclosed taxable supplies, income or assets to be invested or deposited.
4. Tax on Voluntary Disclosure.
5. Disclosure of undisclosed taxable supply, income or asset.
6. Immunity granted to declarants.
7. Secrecy.
8. Consequence of failure to comply with the provisions of this Act.
9. Avoidance of doubt.
PART II
PROVISIONS TO WRITE OFF TAX ARREARS UNDER CERTAIN LAWS
10. Persons to whom this Part applies.
11. Tax arrears to be written off in respect of certain taxes.
12. Tax arrears to be written off in respect of certain individuals.
13. Penalty on tax in default to be written off.
14. Tax arrears in dispute not to be written off.
15. Tax refunds to be set off against the tax arrears written off.
16. Commissioner-General to inform amounts set off against tax arrears.
17. Proper records shall be maintained.
18. Sinhala text to prevail in case of inconsistency.
19. Interpretation.
SCHEDULES
18 of 2021.
AN ACT to enable persons to voluntarily disclose undisclosed taxable supplies, income and assets required to be disclosed under certain laws; to provide for the imposition of a tax on the taxable supplies, income and assets so disclosed; to indemnify the persons who voluntarily disclose any such taxable supply, income or asset against liability from investigation, prosecution and penalties under specified laws; to grant certain concessions to persons who had already disclosed taxable supplies, income and assets under specified laws; and for matters connected therewith and incidental thereto.
[Date of Commencement: 17th September, 2021]
1. Short title.
This Act may be cited as the Finance Act.
PART I
Imposing the Tax on Voluntary Disclosure
2. Persons to whom this Part applies.
(1) The provisions of this Part shall, subject to the provisions of subsection (2), apply to any person who has not disclosed any amount of taxable supply, income or asset which was required to be disclosed under the provisions of any law specified in Schedule I hereto (hereinafter in this Part referred to as “undisclosed taxable supply, income or asset”), in a value added tax return for any taxable period ended on or prior to March 31, 2020 or in a return of income for any year of assessment ended on or prior to March 31, 2020.
(2) The provisions of this Part shall not apply to—
(a) any person in relation to whom investigations or legal proceedings under the provisions of any law specified in Schedule II is pending, in relation to any undisclosed taxable supply, income or asset;
(b) any person who has been convicted of an offence under the provisions of any law specified in Schedule II in relation to any undisclosed taxable supply, income or asset; or
(c) any amount of undisclosed taxable supply, income or asset held by any person, in respect of which an assessment under the provisions of any respective law specified in Schedule I or Schedule IV has been made:
Provided however, the provisions of paragraph (c) shall not apply to any amount of undisclosed taxable supply, income or asset which has not been taken into account in making an assessment referred to in that paragraph.
(3) Every person referred to in subsection (1), not being a person referred to in paragraph (a), (b) or (c) of subsection (2), shall hereinafter in this Part referred to as the “person to whom this Part applies”.
3. Undisclosed taxable supplies, income or assets to be invested or deposited.
(1) A person to whom this Part applies, shall invest or deposit an amount equivalent to the undisclosed taxable supply, income or asset, subject to the provisions of subsections (2) and (3).
(2) If a person to whom this Part applies, intends to invest an amount equivalent to the undisclosed taxable supply, income or asset, he shall—
(a) where he is able to immediately invest such amount, purchase—
(i) shares issued by a resident company;
(ii) treasury bills or treasury bonds issued by the Central Bank on behalf of the Government of Sri Lanka;
(iii) any quoted debt securities issued by a resident company in Sri Lanka; or
(iv) any movable or immovable property in Sri Lanka,
on or after the date of commencement of this Act but prior to March 31, 2022; or
(b) where he is unable to immediately invest such amount available in cash whether in Sri Lankan rupees or in foreign currency, he shall deposit such amount in a bank account, on or after the date of commencement of this Act but prior to March 31, 2022.
(3) Notwithstanding the provisions of subsection (1), the provisions of subsection (2) shall not apply to a person to whom this Part applies who, prior to the date of commencement of this Act—
(a) has utilised an amount equivalent to the undisclosed taxable supply, income or asset, to purchase—
(i) shares issued by a resident company;
(ii) treasury bills or treasury bonds issued by the Central Bank on behalf of the Government of Sri Lanka;
(iii) any quoted debt securities issued by a resident company in Sri Lanka; or
(iv) any movable or immovable property; or
(b) has deposited an amount equivalent to the undisclosed taxable supply, income or asset in a bank account.
4. Tax on Voluntary Disclosure.
(1) A person to whom this Part applies shall be liable to pay a tax to be called the “Tax on Voluntary Disclosure” to the Commissioner-General prior to making the declaration under section 5 subject to the provisions of subsection (2).
(2) Where a person to whom this Part applies intends to disclose—
(a) any undisclosed taxable supply, income or asset other than immovable or movable property in the declaration made under subsection (1) of section 5, he is liable to pay the Tax on Voluntary Disclosure at the rate of one per centum of such amount or income, or on the cost of such asset invested or deposited under section 3; or
(b) any immovable or movable property in the declaration made under subsection (1) of section 5, he is liable to pay Tax on Voluntary Disclosure at the rate of one per centum on the market value of such property on the date of the declaration.
(3) Any amount of the Tax on Voluntary Disclosure paid by a person to whom this Part applies shall not be deemed to be a tax credit or an expenditure within the meaning of the Inland Revenue Act and shall not be refundable.
5. Disclosure of undisclosed taxable supply, income or asset.
(1) Any person to whom this Part applies who has invested or deposited any undisclosed taxable supply, income or asset as specified in section 3 and has paid the Tax on Voluntary Disclosure as specified in section 4, shall on or prior to March 31, 2022, submit to the Commissioner-General a declaration (hereinafter in this Part referred to as the “declarant”) in relation to any undisclosed taxable supply, income or asset, substantially in the relevant form specified in Part I or Part II of Schedule V hereto along with the documents to prove the ownership, date of acquisition and cost or market value of the asset, subject to the guidelines issued by the Commissioner-General under subsection (2).
(2) For the effective implementation of the provisions of this Act, the Commissioner-General may issue necessary guidelines specifying the manner of payment and filing the declaration within one week of the date of coming into operation of this Act.
(3) —
(a) Upon receipt of a declaration made under subsection (1), the Commissioner-General shall verify whether such declaration is in accordance with this Act.
(b) Where the declaration is in accordance with this Act, the Commissioner-General shall accept the declaration in writing and inform of such acceptance to the declarant within 30 days of the date of receipt of the declaration.
(c) If the declaration is not in accordance with the provisions of this Act, the Commissioner-General shall reject the declaration and inform the declarant in writing the reasons for his rejection within 30 days of the date of receipt of such declaration.
(d) If the Commissioner-General fails to inform the declarant as specified in paragraphs (b) and (c) within 30 days the declaration shall be deemed to have been accepted.
(4) Any declarant whose declaration is rejected in terms of subsection (3), shall be entitled to submit a fresh declaration remedying any defects specified in the Commissioner-General’s decision under subsection (3) within 30 days of the receipt of the Commissioner- General’s decision.
(5) Any declarant who provides false or incorrect information in the declaration made under subsection (1) shall not be entitled to the immunity granted under section 6, notwithstanding the acceptance of such declaration by the Commissioner-General under subsection (3).
6. Immunity granted to declarants.
(1) A declarant whose declaration has been accepted by the Commissioner-General under subsection (3) of section 5 and, who has paid the Tax on Voluntary Disclosure as specified in section 4, shall be entitled to enjoy the full immunity from liability to pay any tax, penalty or interest or from any investigation or prosecution—
(a) under the provisions of any law specified in Schedule I hereto, other than the Value Added Tax Act, in relation to any year of assessment ending on or prior to March 31, 2020 in relation to the income or asset disclosed in the declaration made under subsection (1) of section 5;
(b) under the provisions of the Value Added Tax Act in relation to any year of any period ending on or prior to March 31, 2020 in relation to the amount of taxable supplies disclosed in the declaration made under subsection (1) of section 5, unless such tax has been collected by such declarant.
(2) Subject to the provisions of subsection (5) of section 5, the Commissioner-General shall ensure that full immunity as specified above, be granted to any declarant referred to in subsection (1).
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