Lengthy judicial process delays recovery of massive tax arrears
View(s):The recovery of tax arrears running up to billions of rupees has been delayed due to the lengthy judicial process in the country, Inland Revenue Department officials said at a recent meeting of the Parliamentary Committee on Public Accounts (COPA).
The Committee directed the Inland Revenue Department to expedite the recovery of arrears of taxes and fines as only Rs. 224 million has been recovered out of the Rs. 107 billion taxes due under the Legacy computer system, the Parliamentary Department of Communication announced.
The Commissioner General of Inland Revenue H.M.C Bandara recently revealed in Parliament that billions of rupees in tax arrears for many years could not be recovered due to the lengthy judicial process and delays in the courts.
It was also revealed at the committee that the tax evaders are taking advantage of delays in the judicial process to delay their payments, the media release of the department said. This was highlighted at a recent meeting of the COPA chaired by Prof. Tissa Vitarana.
The committee emphasised the need to expedite the court process to recover the arrears and prevent such delays.
The committee further said that the Ministry of Justice, the Ministry of Finance and the Inland Revenue Department will be summoned soon to discuss the matter.
It was revealed at this meeting that the tax files pertaining to the tax period up to 31st December 2015 are under the control of the “Legacy” computer system and from 1st January 2016 under the “RAMIS” computer system.
The Committee pointed out that according to the report, the amount of tax that can be recovered by these systems is not the actual amount of tax that can be recovered.
The Committee directed the Inland Revenue Department that a report be submitted by 31.03.2021 showing the leading institutions among the tax non-payers and their tax arrears that this should be resolved as there is an issue with the accuracy of the list. (BS)