ECONOMYNEXT – The Central Bank said that it was considering legal action against registered limited liability companies that were using personal bank accounts to conduct business for the purpose of tax evasion.
The Central Bank issued a warning against the misuse of personal accounts for ‘illegal activities’, last week (15).
“The reason for that was that we received complaints from banks that clients who had registered a business were conducting transactions not through the account established for that purpose, but through their personal accounts. This could most probably be for tax evasion purposes,” Enoka Mohotty Director of the FIU said.
“We have written to the Finance Ministry, and are in discussions with the Inland Revenue Department and the Registrar of Companies on what possible legal action can be taken,” Mohotty said in reply to question by a journalist at the central bank’s Monetary Policy Review No. 01 of 2024, held on Tuesday (23).
CB Governor Nandala Weerasinghe added that they were trying to close loopholes and enable a more transparent business environment, and also prevent money laundering.
“We know a lot of businesses don’t even give a VAT invoice. They show the business account to the IRD, so their true turnover is not evident,” Weerasinghe said. (Colombo/Jan23/2024)