Better late than never | Daily News

Better late than never

The Government’s decision to rope in all 225 Members of Parliament (MPs) into the tax net under the new tax regulations is indeed a welcome, long overdue step. According to State Finance Minister Ranjith Siyambalaptiya, not just Parliamentarians, all those entering politics via Provincial Councils (PCs) and Local Government (LG) bodies will be required to open tax files. This requirement will also be extended to ministerial staff.

“There will be no preferential treatment for any particular class,” the State Minister was quoted as saying. He added that this measure is to identify those who are obliged to pay taxes and will especially be applied to politicians.

For the new tax laws to have the desired results there should be complete transparency in its implementation. No one who is eligible to pay taxes can be left out on whatever grounds. Compliance by all is the key to its success.

How and on what basis, politicians, especially ruling party politicians, are going to be taxed one will be compelled to ask. Only a handful of Parliamentarians, from all sides, have declared their assets to Parliament. How will the Inland Revenue Department (IRD) decide on the true income of a Minister or a MP? Besides, there are numerous ways where politicians can hide their true income.

One can refer to those Bribery Commission cases against ruling party politicians to conclude the outcome of such an exercise. One also often hears of files (tax or otherwise) of politicians being held by leaders in order to hold the former to ransom in the event they defect to the other side and/or to get them to do their bidding. This means as long as they remain loyal to the leaders they would be safe from exposure. How many such files still languish in the custody of the leaders is anybody’s guess.

What guarantee is there that under the new tax laws things are going to change and that tax dodgers among politicians and evidence of their other shenanigans will be exposed and punitive action taken? Lankan politicians are a special breed and the law becomes more equal to them than to others. Hence, bringing all politicians into the tax net should be a genuine exercise rather than a cosmetic one. The Government must ensure transparency in the cases of all the categories if the new tax proposal is to have its intended benefit.

The move to get all would-be politicians to open income tax files is a positive step, but there could be hidden income that goes unaccounted for. LG politicians are notorious for rip-offs and are known to have a finger in every pie. Chairpersons of certain State bodies live in palatial mansions and possess every conceivable luxury like their senior counterparts in Parliament. Nobody has thought of probing how they acquired such wealth. These are the minions next in line to enter Parliament.

Besides, steps should be taken to unearth all hidden wealth and taxes imposed accordingly. The Government must think of ways of roping in all potential tax revenue avenues that hitherto had escaped detection. All income sources of whoever they may be must be probed and accounted for, if the new tax law is to have any effect.

All measures to widen the tax net and rope in the maximum eligible to be taxed will be of little use if big-time crooks are allowed to escape due to their political connections. It will be grossly unfair to tax only those earning their income by genuine means while turning a blind eye on the favoured few who had amassed ill-gotten wealth. There are children of political leaders who had not done any job during their lifetime freely flaunting their luxury lifestyles, which could not have been possible under ordinary circumstances. Ideally all such cases should come under the microscope. The tax law should be applied evenhandedly and not selectively. Otherwise, those who are liable to pay taxes under the new arrangement would feel aggrieved and find ways to evade taxes.

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