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Automated tax collection system breaking down
The Inland Revenue Department (IRD) will be forced to undertake a costly update or replacement of the automated tax collection system, with the introduction of the new Inland Revenue Act last week. IRD Commissioner General Ivan Dissanayake told the Sunday Times that an assessment was underway on whether the system could be updated or needed replacement.
Trade unions claimed that an upgrade could cost the Government more than Rs 4 billion and replacement would cost even more.The IRD introduced the automated system known as Revenue Administration and Management Information System (RAMIS) two years ago at a cost of more than Rs six billion. This was aimed at creating a more efficient tax and revenue collection system. A Singaporean firm undertook the project.
Mr Dissanayake said that the Singaporean firm had control over the system until 2020 and until then Sri Lankan experts could not get involved in the change of the system without the consent or the support of the Singapore firm.The move comes amidst complaints from the Department’s staff and union members that the automated system was to interface with 23 state agencies such as the Motor Traffic Department, the Customs, the Board of Investment and state banks, but the process had not worked well, thereby affecting tax collection.
Under the system, the IRD was to be equipped to monitor transactions online and determine the tax and revenue to be paid. The department was also hopeful in auditing tax files of those liable to pay taxes, but that too had not been effective, they said. Inland Revenue Service Union Joint Secretary H.A.L. Udayasiri said they had complained to the Finance Ministry and Commissioner General about the shortcomings.
He said the system needed to be corrected immediately. Through the new Act, the Government hopes to raise Rs 800 billion as tax revenue.