IRD Bill under IMF microscope

The much awaited new Inland Revenue Bill, a product of the International Monetary Fund (IMF) and the Sri Lankan authorities, is likely to be delayed along with the release of the third tranche of US$ 168 million out of the total $1.5 billion extended fund facility to Sri Lanka.

The Cabinet of Ministers has already approved the bill presented by Finance Minister Ravi Karunanayake early this month but is yet to be gazetted and presented in parliament.

Responding to an e-mail query by the Business Times, William Murr ay f rom the Fund’s Communications Department disclosed, “Legal experts of the IMF are still analysing the contents of the new draft bill on the Inland Revenue Act approved by the cabinet and they are in discussions with the authorities before deciding on the completion of the second loan review in June”.

Introducing amendments to the bill will not be welcomed by the IMF as it was prepared through extensive collaboration with the Sri Lankan authorities over the past year and incorporates feedback from local experts.

The new law would pave the way for a durable fiscal consolidation based on revenue mobilization—a key pillar of the government’s reform programme.

It however has to clear a hurdle placed by Inland Revenue Department (IRD) officials who are vowing to paralyse tax collection country-wide.

The IRD trade union joint front is opposed to the proposed outsourcing of tax collection which they say would affect their promotional prospects, job security and benefits of employees, a member of the joint committee said. The front has written to the President, Prime Minister and Finance Minister urging the withdrawal of the bill.

Legal experts of the IMF are still analysing the contents of the new draft bill on the Inland Revenue Act approved by the cabinet and they are in discussions with the authorities before deciding on the completion of the second loan review in June

(BS)