Collectible tax revenue in arrears amounts to Rs.175 billion

• The targeted tax revenue for end 2023 is Rs 1.67 trillion
• The Inland Revenue Dept. was advised to coordinate with the gramasevakas to get the information needed

By Yohan Perera   

Collectable income tax revenue in arrears amounted to Rs 175 billion, Ways and Means Committee of Parliament revealed yesterday.   

According to the Ways and Means Committee this is seen as an amount which should have been collected but not collected on the part of the Inland Revenue Department. Accordingly, it was revealed that the percentage collectable tax in mid-2023 is 20 percent of the total tax revenue.    

 Coming up with more disclosures the committee said total ‘held over’ tax revenue as at June 30 2023 has been Rs. 767 billion. The term ‘held over’ refers to the tax revenue that have not been collected and doubtful to be collected by the Inland Revenue Department.   

Total defaulted taxes as per June 30 this year has been Rs 943 billion while the targeted tax revenue for end 2023 is Rs 1.67 trillion.   

Chairman of Ways and Means Committee, Member of Parliament Patali Champika Ranawaka has stressed the need for determining as to how the Inland Revenue Department could handle the Wealth tax and Inheritance tax proposed by the IMF and is to be introduced next year. He also stressed the need for regulating the 45 percent of the market which is not regulated where collecting taxes is concerned. The MP has proposed a study on how the Inland Revenue Department handled wealth tax before 1992 when it was enforced. He therefore instructed the Department to come up with parameters which is to be followed in collecting the proposed new taxes. He also stressed the need for seeking the advice of MPs with regard to the matter.   

The officials of Inland Revenue Department informed the Ways and Means Committee that it would take 24 years for them to open 1.2 million tax files which is the target that has been stipulated by the government. They said they have the ability to open only 500,000 at the end of this year. The Inland Revenue Department had informed the committee that they have completed the bulk registration system.   

It was further revealed that Inland Revenue Department has no details on the revenues earned by private schools, large scale tuition classes, private medical centres, and law firms and engineering firms. The Inland Revenue Department was advised to coordinate with the gramasevakas to get the information needed.   

The Committee further instructed the Inland Revenue Department to look at the possibility of implementing the online ‘RAMIS’ system as a private –public partnership. They have been instructed to come up with a system to administer RAMIS within a month. The committee has also discussed on the loopholes in the legislations which prevent the government from collecting due tax revenue.

• MP Champika Ranawaka has proposed a study on how the Inland Revenue Department handled wealth tax before 1992 when it was enforced