Chartered accountants play important role in boosting tax revenue
Tuesday, 7 October 2014 01:00
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CA Sri Lanka President says Institute helps build bridges between the Inland Revenue Department and taxpayers
In response to a recent newspaper article, the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) has written a letter to the Acting Commissioner General of the Inland Revenue Department refuting the allegations against Tax Consultants
In a letter addressed to Acting Commissioner General of Inland Revenue R.M.R.W. Manchanayake, President of CA Sri Lanka Arjuna Herath stated that CA Sri Lanka is disturbed by the contents of the article under reference which appears to be based on a communication between a newspaper and the Inland Revenue Department (IRD). The letter further stated that “CA Sri Lanka is understandably disturbed by this news article as the majority of Tax Consultants who act as authorised representative are members of the Institute. As such we believe by referring to tax consultants in general in the article, it has brought immense harm to the image of our members practicing as authorised representatives.”
A statement issued by CA Sri Lanka states that, “Authorised Representatives referred to as tax consultants in the newspaper article under reference is a formal legislated role to assist IRD and taxpayers in tax compliance. These authorised representatives play an invaluable role in educating taxpayers on their obligations and compliance requirements. At the same time they assist IRD officials to understand client’s circumstances/context in applying the tax rules and regulations appropriately, ensuring fair enforcement of tax rules/regulations and efficient collection of tax. Our members who are authorised representatives have played a significant role in building bridges between the IRD officials and taxpayers and improving efficiency of tax collection. We believe, if not for the authorised representatives, the cost of tax administration will be far greater than what it is today, particularly given the very frequent changes in tax policy and tax regulations.”
The CA Sri Lanka statement goes on to state that the taxpaying obligation is well defined through legislation and regulations and there should be no subjectivity and ambiguity in fulfilling tax obligations. In this context there should be no room for discretion or concessions. The taxpayers are also intelligent and knowledgeable about their tax obligations as it forms a significant cost of doing business. Further, a fair amount of time and effort is put in by CA Sri Lanka and authorised representatives in educating taxpayers on tax legislation and regulations. Hence, it is not clear as to how the authorised representative can mislead the taxpayer on obtaining concessions.
CA Sri Lanka is the foremost national professional accounting body set up by an act of Parliament over half a century ago and is engaged in the field of taxation since its inception; from grooming students to become skilled professionals, and to consistently harness the skills in taxation among its members and those outside such as officials of the Inland Revenue Department, members of other professions and the general public on all matters connected with taxation.
The Institute is the only body with a full Tax Faculty consistently engaging both members and outsiders on matters related to taxation. The Tax faculty and its members provide valuable input on an ongoing basis in the formulation of national tax policy by engaging both the Inland Revenue Department and the Ministry of Finance. It is the only body that publishes many manuals on Taxation, conducts an annual Tax Oration and a series of seminars and workshops whilst engaging with the Inland Revenue Department on a consistent basis.
CA Sri Lanka emphasises that it is important that the Inland Revenue Department and the Institute of Chartered Accountants of Sri Lanka forge a strong partnership in the transformation of the tax compliance environment and culture in this country and in the proper implementation of the tax policy of the Government. CA Sri Lanka states that it will continue to work with the IRD to improve their capacity to respond to the needs of taxpayers and to improve the capabilities in relation to concepts such as understanding tax obligation based on greater commercial awareness, impartiality, proportionality, openness (disclosure and transparency), and responsiveness.
The letter by CA Sri Lanka to the Acting Commissioner General of Inland Revenue also requests her to refer to the Institute with proof and evidence of any member of the institute who is found to be involved in any malpractice as suggested in the article under reference. The letter states such process would assist the Institute in conducting its own disciplinary inquiry to investigate if such members have acted in violation of the Institute’s code of ethics.
