Tax And Foreign Exchange Amnesty

Link to law: http://www.lawnet.lk/process.php?st=1997Y0V0C4A&hword=%27%27&path=2
Published: 1997

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Tax and Foreign Exchange Amnesty
Tax and Foreign Exchange Amnesty




AN ACT TO ENABLE THE DEPOSIT IN SAVINGS ACCOUNTS IN THE NATIONAL SAVINGS BANK, OF MONEYS REPRESENTING ACCUMULATED PROFITS AND INCOME, RETAINED IN OR OUTSIDE SRI LANKA, AND IN RESPECT OF WHICH A PERSON HAS NOT FURNISHED A RETURN OF INCOME OR WHICH HAVE NOT BEEN DISCLOSED IN A RETURN FURNISHED BY SUCH PERSON UNDER THE LAW RELATING TO THE IMPOSITION OF INCOME TAX, OR OF RELEVANT FOREIGN CURRENCY HELD BY A PERSON OUTSIDE SRI LANKA AND CONVERTED INTO SRI LANKAN RUPEES FOR THE PURPOSE OF SUCH DEPOSIT; TO ENABLE THE WITHDRAWAL OF THE MONEYS DEPOSITED IN SUCH ACCOUNTS FOR SPECIFIED PURPOSES; TO INDEMNIFY PERSONS AGAINST LIABLITY TO PAY CERTAIN TAXES, AND AGAINST PROSECUTIONS OR PENALITIES FOR OFFENCES IN RELATION TO SUCH TAX LAWS AND EXCHANGE CONTROL LAWS; WITH A VIEW TO SECURING FULL COMPLIANCE, IN THE FUTURE, BY SUCH PERSONS, WITH TAX LAWS RELATING TO EXCHANGE CONTROL; AND FOR MATTERS CONNECTED THEREWITH OR INCIDENTAL THEROTO.








BE it enacted by the Parliament of the Democratic Socialist Republic of Sri Lanka as follows:-



[29th April

, 1997 ]













Short title.



1.This Act may be cited as the Tax and Foreign Exchange Amnesty Act, No. 4 of 1997.



Person to whom this Act applies.



2.





(1) This Act shall, subject to the provisions of subsection (2), apply to any person who-





(a) under the law for the time being applicable to the imposition of income tax for any year of assessment ending on or before March 31, 1996, in respect of any profits and income which arose, or accrued, on or before March 31, 1996, and who has not furnished a return of income under the provisions of such year of assessment or who has not disclosed such profits or income in any return furnished by him under the provisions of such law for any such year of assessment; or



(b) holds any relevant foreign currency outside Sri Lanka.



(2) This Act shall not apply to any person in relation to whom any investigation was pending on February 15, 1997 for-





(a) any alleged or suspected evasion of any tax payable under, the law for the time being applicable to the imposition of income tax or the Finance Act, No. 11 of 1963 or the Turnover Tax Act, No. 69 of 1981, or the National Security Levy Act, No. 52 of 1991, in respect of any profits and income or turnover, as the case may be, which arose or accrued to, or was derived, by such person on or before March 31, 1996;



(b) any alleged or suspected violation, of any provision of the Exchange Control Act or the Prevention of Terrorism (Temporary Provisions) Act, No. 48 of 1979.



(3) Every person referred to in subsection (1), not being a person referred to in subsection (2), shall, hereafter in this Act, be referred to as a person to whom this Act applies-



Persons to whom this Act applies may deposit moneys in special accounts in the Bank.



3. A person to whom this Act applies who-





(a) has any moneys (not being relevant foreign currency) in or outside Sri Lanka, which represent accumulated profits or income for any year of assessment ending on or before March 31, 1996, and in respect of which such person has not made a return of income or which such person has not disclosed in the returns of income made by him under the law for the time being applicable to the imposition of, income tax or surcharge on income tax; or



(b) holds any relevant foreign currency,



may, in the case of such moneys as are referred to in paragraph (a), deposit such moneys or convert and deposit such moneys, on or after February 15, 1997, but prior to August 15, 1997, to his credit, in a special account opened by him for that purpose in the Bank, and in the case of such foreign currency, on or after February 15, 1997, but prior to August 15, 1997, to his credit, in a special account opened by him for that purpose in the Bank.



Declarations to be furnished by depositors.



4.





(1) Every person who deposits any moneys in a special account in the Bank under the provisions of section 3 shall make a declaration to the Bank in the form set out in the Schedule to this Act.



(2) The Bank shall cause a copy of every declaration made to it under subsection (1) to be transmitted to the Commissioner- General, and in the case of a declaration made in respect of any foreign currency converted and deposited, the Bank shall cause a copy of such declaration to be transmitted to the Controller of Exchange.



Restrictions on withdrawal of moneys deposited in special accounts.



5. Notwithstanding anything in any other law the Bank shall not permit any person who has deposited any moneys in any such special account as is referred to in section 3 to withdraw, prior to the expiration of a period of two years from the date on which the deposit was made, the whole or any part of the amount lying to the credit of such person in such special account (other than the interest accruing on such amount), except for the purposes, and after the period, specified in the proviso to subsection (1) of section 6.



Purposes for which moneys deposited in special accounts may be withdrawn.



6.





(1) Any person who ahs deposited any moneys in any such special accounts as is referred to in section 3 may withdraw the balance amount lying to his credit in such special account after the expiration of a period of two years from the date on which he made the deposit:



Provided, however, that such person may upon being authorized in writing by the commissioner-General; to do so, withdraw, after the expiration of a period of one month from the date on which he made the deposit, the whole or any part of such balance amount, for investment in an agricultural or industrial undertaking or facility for infrastructure development, being an undertaking or a facility which has been duly authorized by any Government Authority or by any local authority or the Board of Investment of Sri Lanka established by the Board of Investment of Sri Lanka Law No. 4 of 1978.



(2) Where any person who withdraws after the period of one month from the date on which he has made the deposit, any moneys lying to his credit in any such special account as is referred to in section 3, for any of the purposes specified in the provision to subsection (1), fails to apply such moneys for the purpose for which such moneys were withdrawn, such person shall be guilty of an offence under this Act and shall on conviction after summary trial before a Magistrate, be liable to a fine of an amount equal to the moneys withdrawn and an amount not exceeding one hundred thousand rupees.



(3) Where any person withdraws after the expiration of a period of one month from the date on which he made the deposit, any moneys lying to his credit in any such special accounts as is referred to in section 3, for any of the purposes specified in the provision to subsection (1), the Bank shall cause to be transmitted to the Commissioner-General, the details regarding every such withdrawal.



Interest on moneys deposited in special accounts.



7. The Bank shall pay interest on the amount lying to the credit of any person in any such special account as is referred to in section 3, at the current rate of interest payable by the Bank on moneys lying to the credit of savings accounts. The interest so accruing may be with drawn by such person after the expiration of a period of one month from the date on which he made the deposit.



Indemnification from certain taxes and prosecutions.



8. Any person to whom this Act applies, who has deposited any moneys in any such special account as is referred to in section 3, shall not be liable-





(a) to pay-





(i) any income tax or surcharge on income tax payable respectively, under the law for the time being applicable to the imposition of income tax and the law for the time being applicable to the imposition of surcharge on income tax, in respect of such part of his profits and income for any year of assessment ending on or before March 31, 1996, as is represented by him in such special account;



(ii) any wealth tax or surcharge on wealth tax payable respectively, under the law for the time being applicable to the imposition of wealth tax and the law for the time being applicable to the imposition of surcharge on wealth tax in respect of such part of his net wealth for any year of assessment ending on or before March 31, 1996, as was acquired by the utilization of any such part of his profits and income as is referred to in sub-paragraph(i);



(iii) any business turnover tax under the Finance Act, No. 11 of 1963 or nay turnover tax under the Turnover Tax Act, No. 69 of 1981 or any National Security Levy under the National Levy Act, No. 52 of 1991, in respect of the turnover from which such part of the profits and income as is referred to in sub paragraph (i), arose or was derived; or



(b) to a prosecution or to a penalty for any offence under-





(i) the law for the time being applicable to the imposition of, income tax or surcharge on income tax or wealth tax or the surcharge on wealth tax in relation to any year of assessment ending on or before March 31, 1996, in respect of, or in connection with, such part of his profits and income as is referred to in sub-paragraph (i) of paragraph (a) or such part of his net wealth as is referred to in sub-paragraph (ii) of paragraph (a) ;



(ii) the Finance Act, No. 11 of 1963 or the Turnover Tax Act, No. 52 of 1991 in respect of , or in connection with, such turnover as is referred to in sub-paragraph (iii) of paragraph (a);



(iii) the Exchange Control Act, in respect of the whole or any part of the relevant foreign currency converted and deposited by him in such special account.



Preceding provisions of this Act, not to be construed as authorizing the revision of any assessment previously made.



9. Nothing in the preceding provisions of this Act shall be read or constructed as authorizing the revision of -





(a) any assessment made under the provisions of-





(i) the law for the time being relating to the imposition of, income tax or surcharge on income tax or wealth tax or surcharge on wealth tax ; or



(ii) the Finance Act, No. 11 of 1963, the Turnover Tax Act, No. 69 of 1981, or the National Security Levy Act, No. 52 of 1991;



(b) any requirement imposed before March 31, 1996, on any person to whom this Act applies and in relation to any violation by him of any provision of the Exchange Control Act ; or



(c) any other matter,



which has become final and conclusive under the provisions of any such law.



Maintenance of secrecy.



10.





(1) Subject to the provisions of subsection (2), every officer or employee of the Department of Inland Revenue or of the Department of Exchange Control or of the Bank shall preserve, and aid in preserving, secrecy with regard to all matters that may come to his knowledge in the administration of this Act and shall not give, divulge or reveal, any information whatsoever regarding any such special accounts as is referred to in section 3 to any individual, corporation, bank, court, institution, entity, department, official, agent, representative of the Government of Sri Lanka or to any other or natural person.



(2) Notwithstanding the provisions of subsection (1), the Commissioner-General or the Controller of Exchange, or an officer or employee of the Bank, as the case may be, shall if he is required to do so -





(i) by the person to whom such matter or information relates ;



(ii) by an provision of any law giving effect to an international convention on narcotics or hijacking, in any criminal proceedings instituted under that law, in any court ;



(iii) by an order of the Supreme Court, made on application there for, on the ground that moneys in any special account referred to in section 3 have been, or are being used, in furtherance of an act which constitutes an offence under the Prevention of Terrorism (Temporary Provisions) Act, No. 48 of 1979 ; or



(iv) by an order of any legal proceedings instituted by or against the Bank or by or against the holder of a special account referred in section 3, relating to a banking transaction arising from such special account, communicate to such person or court in so far as a such communication is strictly necessary for the purposes of complying with such requirement or order of court, any matter or information which has come to his knowledge in the administration of this Act.



(3) Any officer or employee of the Department of Inland Revenue or of the Department of Exchange Control or of the Bank who acts in contravention of the provisions of subsection (1) shall, be guilty of an offence under this Act, and shall on conviction after summary trial before a Magistrate, be liable to a fine not exceeding one hundred thousand rupees or to imprisonment for a term not exceeding one year or to both such fine and imprisonment.



Sinhala text to prevail in case of inconsistency



11. In the event of any inconsistency between the Sinhala and Tamil texts of this Act, the Sinhala text shall prevail.



Interpretation.



12. In this Act, unless the context otherwise requires-



"Bank" means the National Savings Bank established by the National Savings Bank Act, No. 30 of 1971;



"Commissioner-General", "local authority" "net wealth" , "profits and income ", and "year of assessment" shall have the respective meanings assigned to them by the Inland Revenue Act, No. 28 of 1979;



"Controller of Exchange" means the officer designated as the head of the Department of Exchange Control of the Central Bank and includes an officer designated as assistant to him ;



"Exchange Controller Act" means the Exchange Control Act (Chapter 423) ;



"Foreign currency" means any currency other than Sri Lanka currency and includes any currency payable by a foreign Government or institution to a person in or resident in, Sri Lanka in respect of his pension or other gratuities due to him and all deposits, credits and balances payable in any currency other than Sri Lankan currency and any such drafts, travelers cheques, letters of credit and bills of exchange as are expressed or drawn in Sri Lanka currency but payable in any currency other than Sri Lankan currency ;



"person" includes a company, a body of persons or a partnership ;



"relevant foreign currency" in relation to a person means foreign currency held on March 31, 1996 by such person outside Sri Lanka in violation of the provisions of the Exchange Control Act, being or being attributable to, profits and income or not being or not being attributable to profits and income, and which was acquired by him outside Sri Lanka by way of gift, donation, inheritance or otherwise ;



"the law for the time being applicable to the imposition of income tax" means the Inland Revenue Act, No. 28 of 1979 ;



"the law for the time being applicable to the imposition of surcharge on income tax" means the Surcharge on Income Tax Act, No. 26 of 1982, the Surcharge on Income Tax Act , No. 12 of 1984, the Surcharge on Income Tax Act, No. 7 of 1989;



"the law for the time being applicable to the imposition of wealth tax or surcharge on wealth tax" means the Inland Revenue Act, No. 28 of 1979, the Surcharge on Wealth Tax Act, No. 25 of 1982 and the Surcharge on Wealth Tax Act, No. 8 of 1989;



"turnover" and "quarter" shall have the respective meanings assigned to them by the Turnover Tax Act, No. 69 of 1981.



Schedules