Colombo, Nov 06: Sri Lanka today announced plans to tax informants who help the authorities catch tax-dodgers. Under the new rules, the whistle-blowers themselves would get entangled in the tax system. Finance minister K N Choksy unveiled the government's 2003 budget proposing a 10 percent withholding tax on all "reward payments to informants and others" who provide information on black money. A share of fines imposed on offenders usually go to informants. Now a share of the reward money will be taken back by the government as a special tax.

The "withholding tax" would automatically bring whistle-blowers into the tax net and subject them to scrutiny by tax authorities as much as those they rat on. In another unusual move, the government imposed a 10 per cent tax on all lottery winnings not less than $ 5,200. Lotteries are a virtual state monopoly.

Bureau Report