Amid financial crisis, Sri Lanka passes a bill to legalize undisclosed assets

9/7/2021
The Sri Lanka Parliament on Tuesday passed a Finance Bill which allows legalising undisclosed assets.

The Finance Bill, which was passed with 144 votes in favour and 44 against it, was moved to enable persons to voluntarily disclose undisclosed taxable supplies, incomes and assets required to be disclosed under certain laws and to provide for the imposition of a tax on the taxable supplies, incomes and assets so disclosed.

The bill provides opportunities to invest amounts equivalent to the undisclosed tax value, in shares issued by companies, treasury bills issued by the Central Bank, credit securities issued by a company and movable or immovable properties.

However, the opposition had complained that the bill would pave way for money laundering and legalise black money.

A number of opposition parties had gone to the Supreme Court challenging the bill. They argued that the bill is an invitation for the money launderers to seek protection under it.

The opposition had also argued that the bill would surpass the existing laws like the Prevention of Money Laundering Act, Suppression of Terrorist Financing Act, Bribery Act and Illicit Traffic of Narcotic Drugs and Psychotropic Substances Act, which are also vital legal safeguards against related offences.

The Supreme Court had sent the guidelines to the parliament that needed to be followed to pass the bill.

Faced with the worst economic crisis, Sri Lanka is going through a number of financial challenges including shortage of foreign reserves to pay for essential food imports, mounting foreign debts and local currency depreciating against the US dollar in record law.

One of the main foreign currency earners, tourism, which accounted for over 10 per cent of GDP in 2019, has been suffering since the 2019 Easter Sunday attacks and the Covid-19 pandemic. The country is desperate to attract investors, both local and foreign.

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