IRD urges digital collection of tax data

•  Parliamentary committee instructs IRD to collect data on individuals earning above Rs.100,000 
•  IRD only succeeded in opening 368,455 tax files in 2023

The Committee on Ways and Means has instructed the Inland Revenue Department (IRD) to collect the data of individuals earning above Rs.100,000 per month, on a digital platform, instead of all persons above 18 years of age.
The committee, which met under the chairmanship of Patali Champika Ranawaka, in Parliament, on April 2, this year, issued the above instructions to the IRD.
The government introduced mandatory income tax registration for everyone above the age of 18, from the beginning of this year.
With effect from February 1, the individuals have been required to maintain a tax file with the IRD for vehicle registration, revenue licences and property purchases.
Although the budget for the year 2023 proposed the IRD to open 1.2 million tax files within 2023, the IRD succeeded in opening only 368,455 tax files in the year, according to the Second Report of the Committee on Ways and Means. 
“… opening a tax file is a complex process in the IRD, which consists of 20 parameters to be filled for the normal registration of a taxpayer. Moreover, the process of inputting data into the Revenue Administration Management Information System (RAMIS) and initiating a formal tax file consumes a significant administrative period,” it stated.
Consequently, the report highlighted that surpassing the threshold of opening tax files beyond 500,000 annually poses a considerable challenge for the IRD.
The committee also recommended the IRD to establish a public-private partnership model, through an open tender, to maintain the RAMIS. It also sought the Attorney General’s opinion on whether the signed agreement information related to the RAMIS can be released to a third party.