Inland Revenue, Treasury to issue new Gazettes with tax exemptions

By Mario Andree

Ceylon FT: With the Central Bank pushing for financial sector consolidation, calling for proposals by 31 March, the Department of Inland Revenue and the Treasury would submit tax concessions through new Gazette Notifications.

Partner of Ernest and Young, Duminda Hulangamuwa told a forum organized by the Institute of Charted Accountants that there were several tax proposals the Inland Revenue Department and the Treasury would introduce in the coming few days.

However, despite the push by Central Bank and several negotiations with key personnel, the Inland Revenue Department and the Treasury were confused on how the process would take place.

President Mahinda Rajapaksa, last November, through Budget 2014 announced a series of tax incentives to banks and non-bank financial institutions which would merge or acquire other entities.

The financial sector regulator, Central Bank, intends to reduce the number of non-bank financial institutions to 20 including three which would specialize in micro finance and banks to fewer larger banks to support the economy.

According to Hulangamuwa the proposed tax revisions for consolidation included, no income tax from profits arising from transfer of assets, capital allowance is to be claimed by the merged entity on the original cost, expenses incurred for merger would be deductible, qualify payment relief on investment made on merged entity and tax credit, refunds of transfer entity to be available for merged entity.

A new Gazette also will be issued exempting stamp duties other than for immovable properties for the consolidation process.
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`In a previous thread I saw someone saying that, no entity would want to dilute their NAV's by merging with the likes of TFC et al, well, here is Cabba's carrot for doing so.

Seems to be CBSL is rushing for some other reason.

I think a few buddies who are deep in it ,are getting a ticket out, something akin to what George Bush did at the 11th hour of his term.