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Govt. revenue plans in disarray
The Government’s revenue plans for the year are in disarray with the Treasury yet to set out revenue targets for the Inland Revenue Department (IRD) amidst an anticipated tax collection drop by as much as Rs 400 billion, officials said.
A senior Treasury official said the absence of a full budget had resulted in the delay in setting out revenue collection targets to the IRD.
The Government is now operating on a Vote on Account passed by the former Government until the end of April this year. It is due to present a similar Vote on Account for expenses until July when a budget is presented for the next few months.
“Another reason for not giving a revenue target is due to large concessions given by the Government,” the official explained.
He said, however, they were planning to give the targets before the full budget was presented in July.
The IRD has delayed setting up its own action plan on collection of taxes as it has not received its targets.
In view of the tax concessions offered by the Government soon after the presidential election, the IRD has set aside some 400,000 tax files from which it previously collected taxes. Among the concessions given were reduction of the Value Added Taxes, the PAYE Tax, the Nation Building Tax and the withholding Tax.
IRD sources said that in view of the concessions offered, they could have taken other measures if targets had been set.
Last year the Government set a target of Rs 800 billion to the department, and it ended up collecting a sum of Rs 785 billion, despite the Easter Sunday bombings which affected the revenue collection, officials said.
Despite the Government’s programme to provide tax concessions and pass on the benefit to the consumers, in some of the sectors the benefits have, however, not been passed on to the consumers, officials admitted.