MP Mahindananda misled by mislabelling in govt. reporting

FactCheck.lk interpreted the MP as making three claims, that in the year 2021, (1) there were 507,000 registered taxpayers, (2) of which 68,000 were companies, and (3) 292,000 were individuals.

To evaluate these claims, FactCheck.lk consulted the Inland Revenue Department’s (IRD) annual performance reports. 

On claim 1, Table 2.13 of the IRD’s 2021 performance report states that the “total number of registered taxpayers” amounts to 507,095, which aligns with the MP’s claim (Exhibit 1). However, the reported figure is denoted incorrectly. The figure reported is the number of taxpayer registrations and not the number of registered taxpayers. There is a difference.

The number of registered taxpayers refers to the number of entities (individual or corporate) that are registered to pay taxes. 

Whereas the number of taxpayer registrations refers to the number of registrations lodged with the IRD to pay various types of taxes.  A single taxpayer entity can be required to register for several types of taxes, as a result the number of registrations will exceed the number of taxpayers. For example, a company would be registered for both corporate income tax and for value-added tax (VAT). This counts as two separate registrations but it is still one taxpayer. 

The performance report lists the number of taxpayer registrations but mislabels it in the total column as the number of taxpayers. This is the case in all the language versions of the report (English, Sinhala, and Tamil). Thus, although the MP’s claim of 507,000 registered taxpayers matches the performance report, it is still inaccurate. 
On claim 2 and claim 3, the performance report confirms that the 68,000 corporates and the 292,000 individual taxpayers figure cited by the MP is in line with the reported numbers (Exhibit 1). The MP correctly cites all of the numbers in the performance report, but the performance report has labelled incorrectly one of the numbers he cites.

Therefore, we classify the statement as PARTLY TRUE.

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