CEB paid employees'paye tax

In a shocking disclosure, the Ceylon Electricity Board (CEB) employees have been exempted from having to pay Pay-As-You-Earn (PAYE) tax, a costly move for which the CEB has incurred a sum of Rs.1,407 million between 2010 and 2014, which it paid on behalf of its employees. Highly placed sources say the CEB and other state-owned-enterprises such as the Ceylon Petroleum Corporation, institutions which come under the purview of the Power and Energy Ministry, pay a cumulative tax on behalf of its employees.

“This issue has been flagged by the COPE report as well. However the state had not been able to do anything about it. The issue was raised at Cabinet meetings but it didn’t go beyond that,” reliable sources told the Daily News. “It is very unfair on the general masses who pay taxes and are double taxed.”

According to the Auditor General’s Department, the CEB had paid Rs. 215,052,824 and 362,275,677 as PAYE tax in 2009 and 2010, respectively. The CPC paid Rs 58,058,980 and Rs. 166,283,989 as PAYE tax in 2009 and 2010, respectively.

Furthermore, a closer inspection of the Annual Report of the CEB shows that the PAYE tax payment is listed as ‘irregular payments’. The 2014 Annual Report says; “the Board (CEB) had paid the PAYE tax on behalf of its employees contrary to the Cabinet decision taken on December 13, 2007 to shift the PAYE tax liability to employees since the next salary revision which should have been effected since 2009.

The PAYE tax paid by the Board since the year 2010 to December 31, 2014 was Rs.1, 407 million.”

Elaborating further, the report cites that; “the PAYE Tax liability of CEB employees has been borne by the CEB since its employees were made liable for PAYE Tax. This was informed to the Ministry of P & E and Salaries and Cadre Commission several times and discussions were held with Trade Unions. However no consensus was reached.”

Meanwhile it has been brought to the notice of the publication that 39 different staff allowances had been paid from time to time to CEB staffers on the approval of the board of directors without Cabinet approval, as specified in the Public Enterprises Circular No 95 of June 4, 1994.

At the Audit test, checks revealed that such allowances amounting to Rs. 849 million had been paid in the year 2014 as compared with Rs. 642 million so paid in 2013. Sources told the Daily News that employees who continue to engage in strike action or work-to-rule campaigns cannot draw allowances however, CEB employees continue to accept disturbance allowances and others despite being on strike.