Beware tax dodger professionals: You are under duty to play your part
Posted on November 23rd, 2010

VISHVAMITHRA

The announcement made by the President Rajapakse in the budge speech should open the eyes of all professionals in this country, particularly the lawyers and the doctors, who shamelessly indulge in defrauding the public funds by not paying the tax due on their income.

The current tax rate on personal income has been reduced, ranging from 5 to 35 percent to 4 to 24 percent.  The tax-free threshold income also increased from Rs 300,000 to Rs 500,000 and the tax slabs from Rs 400,000 to Rs 500,000. 

This handsome tax concession carries a clear massage to the professionals, particularly lawyers and doctors, to respect their obligations and to pay taxes on their income. The people of this country are fully aware that probably less than one per cent of professionals declare their true income for tax purposes and pay tax on them, effectively widening the gap between those who have everything and those who have nothing at all.

It is pointed out that the root cause leading to this problem and so many other problems is the absence of professional bodies to regulate the legal and medical profession with a firm commitment to protect the public interests leaving no room for abuse. Whereas in other parts of the world there are regulatory bodies created by law are in place to protect the public interests, it is very unfortunate that in Sri Lanka this fundamental necessity is lacking, allowing the so-called professionals to indulge in all kinds of wrongdoing at will. In this country the primary objective of the trade unions created by lawyers and the doctors [Bar Association and the GMOA] is to protect the interests of the members in the respective professions with a scant respect their obligation to the society at large.

Abuses in the legal profession

In Sri Lanka, it is observed that there is nothing in place that prevents lawyers from quoting any fee as they please and charge fees in hard cash, issuing no receipt at all. And there are no regulations in place to protect the clients’ interests such as issuance of a mandatory client care letter at the acceptance of the instructions, setting out the legal issues in the cases undertaken by the lawyers, full breakdown of the fees, the methodology of the computation of the fees, the rights of the clients with full details of where to report any misconduct committed by the lawyer retained by the client and so on and so forth.

In the absence of proper regulatory process, the lawyers in this country are allowed to exploit the innocent clients scot-free quoting exorbitant fees. In some cases fees charged running into some millions. Yet, nothing declared for tax purposes. In fact, it is observed that whereas there are a large number of lawyers who earn millions per annum, nobody declare their true income and pay tax due on their income. Surely, the time has come to put a stop to this abuse and to set up a regulatory body by law bringing an end to this antisocial and bad practice.

It is observed that in more civilised countries like in the UK, where protection of the public interests is considered to be paramount important, a large member of members in the profession is regularly struck off, some times with severe financial penalties imposed against abuses, whereas no such process followed in Sri Lanka.

In the eyes of right thinking people, the ignorance of this fact by the government elected by the people is clearly a slap in the face of the people, whose sovereign rights are exercised by the lawmakers and the President who have hitherto failed to take right steps in the right direction to protect the citizens from endless abuses and also to ensure proper collection of the revenue due from the income generated by those who engage in legal profession.

 Abuses in the medical profession

 This is another profession where the members are allowed to enjoy absolute immunity from wrongdoing. Abuses of office by the government doctors who also allowed engaging in the private practice are rampant in this country with no process available to deter wrongdoing. It appears that their main concern is the private practice and their responsibility in the public service has become mere secondary.  These immoral professionals start their day with the private practice and end the day with the private practice. The extend of abuse is such that some doctors, unless the patients enter to his ward with a consultation through private practice, the patient get only a step motherly treatment at the government hospital.

It is also observed that only a handful of doctors spent adequate time with their patents at consultations because their primary concern is to earn the maximum income for the day without proper investigation of the patents. Some doctors simply prescribe medication and refuse to spend sufficient time informing the patents about what illnesses they suffer from, which is considered a violation of their professional duty and the patents’ right to information about illnesses and the treatments recommended by the medical professionals. In some cases due to sheer failure on the part of the medical professionals patents breathe their last breath. Yet as there is no proper regulatory body in place to protect the public interests, most of the culprits go scot-free with no sanction, pecuniary or otherwise, imposed on them for their professional misconduct and negligence.

The worse part is the fee collection procedure adopted by the medical professionals where the fees collected is not accounted for. This unacceptable practice applies to all professionals engage in the medial profession where only a handful number issue receipts for their fees. In the event a patient is admitted to a private hospital for a treatment, which could sometime lead to a complicated medical procedure, the hospital fee is charged separately and the doctors fee is charged separately in hard cash [no receipt issued] or advised the patient to hand over the doctors fee to the particular doctor. Again, this irregular process is followed merely evade payment of tax on the income generated from private practice.

The people of this country who elected President Rajapakse with overwhelming mandate expect him to use his due diligence to address these burning issues swiftly and decisively protecting the interests of the citizens. Whatever the remedial measure taken should address both issues highlighted here; one should aimed at protecting the interests of the citizens of this country from the most unpleasant level of exploitation of the immoral professionals and the other to compel the so-called professional to respect the law of the land and pay taxes due on the income generated by them that had been denied to government coffers for a very long time. 

One Response to “Beware tax dodger professionals: You are under duty to play your part”

  1. Leela Says:

    Practically all doctors work long hours after their routine work in government hospitals to earn extra money. We should appreciate their service and their hard work. But they should not become moon lighters. By that, I am not suggesting for a moment that they should not engage in private practice or open private hospitals or earn good money. Indeed, in today’s environment, everyone must earn money.

    What I am trying to say is; doctors are morally bound to assist the government and the public more than those in other professions. Why? Because except for a few doctors that were qualified abroad, all others were paid by the government with public funds to earn their qualifications. I mean, the government had spent more money per capita on doctors than on others in other professions. So, leave out the lawyers that everyone knows as sharks, what the writer of this article says is absolutely true: Doctors should pay up their taxes and set an example to others.

    Now referring to lawyers, as I said before, they are nothing but sharks. After A/L, it takes just three years to be a layer whereas it takes six years to be a doctor. Yet, the bottom notch of lawyers earns much more than the bottom notch of doctors. Observe the payments collected by lawyers that swamp around any magistrate court; there is no set pattern for their fees. Same lawyer would charge a different fee from different persons for identical cases. A lawyer that charge 5,000/- from a well-to-do person may charge Rs.1000/- from a pauper like man for alike case. The fee may be only to stand up at courtroom and say ‘I appear’. And that stand-up time may be half a minute, or zero if the magistrate is absent. Time and again, almost all cases are postponed; and the ritual would repeat on another day.

    Top notch of lawyers earns much more than the top of doctors as well. A top notch lawyer could charge well over Rs.100,000/- for an appearance. Perhaps, Rs500,000/- for a bail application. Whatever it is the procedure is the same as what was said earlier. The stand-up time in court may be few minutes, or zero if the magistrate or the judge is absent. Either way the lawyer keeps all the money. And the ritual would carryon on the next date.

    Apart from court appearances, lawyers earn money from consultations and deed writings. It is all larger-than-life business. Today no lawyer earns less than 10,000/- a day from their professional work. But on average, they earn 50,000/ daily. How much they pay as taxes? Only tax man knows!

    I am sure none of these are secrets to our President. He knows almost all lawyers are master tax evaders. And tax evasion is a crime. I believe a billion rupees could easily be collected from lawyer as direct taxes without a burden to them. All government should do is; compel the Lawyers and doctors to maintain a client register and issue a receipt for all collections. If a simple grocery and café owners could issue bills and receipts why not sophisticated lawyers? They should be provided an accounts program free of charge and compelled to do their accounts on line. Then the taxman can keep an eye on them.

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