Speaking
on reforms in the region, Dr Singh stated that reforms
in Malaysia are ongoing and some of the specific areas
were self assessment to companies/individuals, Goods and
Service Tax (GST), introduction of Tax Audits and Tax
Investigations and clarification of rights and
obligations of all parties. Thailand’s major reform
was the introduction of VAT in 1992; Singapore
introduced a single tier system of Corporate Taxation in
2003. Philippines revised their VAT rates in 2005 and
also took steps to introduce Tax Amnesties from 2005 to
2007.
Indonesia‘s
reforms were primarily focused on tax administration
aspects. Dr Singh was of the opinion that all countries
focus on incentives to attract investment but the best
could be to lower corporate tax rates.
Sri
Lankan tax reforms have been progressive but consistency
has been lacking. The Taxation Commission report of 1990
follow up has been poor resulting in ad-hoc decisions.
The Commission recommended the abolition of wealth
taxations but since of late Income Tax return requires
disclosure on wealth thus affecting tax payer confidence
in the system. In the mid nineties Sri Lanka moved from
Business Turnover Tax (BTT) to Goods & Service Tax (GST)
& when GST was gaining familiarity GST was replaced
by Value Added Tax(VAT). Sri Lanka’s basic corporate
Income Tax rate too has lacked consistency.
In
1993 the government introduced a Tax Amnesty which of
course had many flaws but a subsequent government
repealed this law creating chaos in the system. In 2004
the government implemented a Minimum Advanced Tax under
the style of Economic Service Charge (ESC) based on
turnover perhaps not known in any other part of the
world. Several amendments were brought over the years to
mitigate the effects on the businesses. The long delays
associated with VAT and Income Tax Refunds affect the
confidence in the system affecting compliance.
On
compliance Dr Singh suggests that to facilitate
compliance adjustments for tax computations should be
minimal, reduce the time frame for resolving appeals,
minimize tax returns on those who have only employment
income, timely refunds, ombudsman servics, environment
for voluntary compliance etc.
One
third of the compliance budget of the Australian
Taxation Office (ATO) is on services to the tax payer.
In
facilitating compliance the underlying philosophy should
be that the tax payer is a client and not a thief to be
caught.
In
the United States the Internal Revenue Services (IRS)
surveyed 50,000 people to help the agency improve the
way it provides taxpayer services.
These
surveys are designed to provide the IRS with greater and
more accurate understanding of the taxpayer needs.
Informative
websites are now being used by most countries. The ATO
and IRAS (Singapore) provides email facility to any
registered tax payer. Thailand uses “e-tax info”
delivering regulations and rulings via email. Thailand,
Malaysia and Singapore provide e-filing facilities.
Facilities will soon be available for tax payers to view
their balances.
Dr
Singh in conclusion stressed the need to recognise the
tax payer’s rights that has become very important in
this current day and age. Tax agencies must adopt best
practices, use technology, minimize delays, and provide
friendly and courteous service. Introducing a well
crafted tax payer’s charter and monitoring its
effectiveness is a significant aspect of the culture of
being accountable and receptive to ideas.
The
delivery of Dr Veerinderjeet Singh a renowned Tax expert
in the region was timely and should serve well for our
authorities to take note particularly for reforms, tax
payer rights, simplicity and technology being the key
ingredients for a significant change to the whole tax
culture.
For
the 12th successive occasion the medallion to the
speaker was presented by Esmond Satarasinghe, Former
Chairman of Brooke Bond, and a member of the first ICASL
council and for many years thereafter.
Source
:
Sunday
Times.lk - Columbo, Sri Lanka, dated 18/11/2007
