The Hon. Faiszer Musthapha, PC

¶ 01 Hon. Presiding Member, I take pride in speaking on the Inland Revenue (Amendment) Bill.

¶ 02 We have not previously had criminal sanctions for certain areas under the Inland Revenue Act. This Amendment is draconian. Clause 31 permitted, even while an appeal is pending before the Tax Appeals Tribunal or a writ is pending, the Commissioner to file a certificate in the Magistrate’s Court and initiate proceedings. The Supreme Court, in its Determination, held this unconstitutional and requiring a two-thirds majority and a Referendum. You have now brought amendments accordingly. But your mindset is revealed—empowering the Commissioner to move Magistrate’s Court despite pending appeals is draconian. Tax collection is vital, but people suffer and seek redress when they believe the Commissioner’s decision is unlawful.

¶ 03 Further, Clause 34 (new section 185A(1)) criminalizes failures: not filing quarterly statements under section 86, not furnishing a return under section 93, not registering under section 102, not appearing under a notice per section 123, and not filing a tax statement under section 126—now punishable with up to six months’ imprisonment and a fine up to Rs. 400,000. Previously, such lapses did not attract criminal action; they were handled administratively or civilly. This will hit ordinary people; big companies can manage.

¶ 04 You say everyone must have a tax file. The effect will be innocent people being hauled before Magistrates. Convictions will complicate foreign travel, etc. I urge the Government to refrain from criminal sanctions for such lapses. Failure to register or file on time due to difficulties is not tax evasion. Punishing inadvertent non-compliance with criminal sanctions is ethically questionable. No previous Government took this route. Please reconsider.

¶ 05 Additionally, VAT threshold per month has been reduced from Rs. 5 million to Rs. 3 million. VAT is on turnover, not profit. In today’s context, this burdens people. Also, effective VAT is 18% plus 2.5% SSCL, totaling 20.5%. You were elected promising not to burden the people, but taxes keep increasing. I request you to review the VAT threshold decision.