Tax Chief vows to be ‘nice’ to the public

Tax officers being ‘nice and friendly’ to the public and the prevention of tax frauds like the Rs 3.57 billion VAT scam is high on the list of priorities of the new Commissioner General of Inland Revenue S. Angammana, described in tax circles as ‘scrupulously’ honest.

The new tax chief, who may have not got the job if not for agitation by unions and staff following reports that a more junior officer was being earmarked for the position, told The Sunday Times in an interview that the Inland Revenue Department operations are to be streamlined and modernized by introducing automation for revenue collection procedures and documentation to curb tax dodging. He said he was concerned about issues like the VAT scam which ruined the image of the department. Former Tax Chief A.A. Wijepala, facing accusations of complicity in the VAY scam, retired this week and was not given an extension as speculated.

Angammana said that his immediate task is to make a paradigm change in the Department, creating a tax culture conducive for the people where the officials will not have to go after them to collect taxes. He added that tax payers should be motivated to pay their dues voluntarily under a self assessment scheme.

He disclosed that the department has been entrusted with the task of collecting Rs. 410 billon from all taxes including Rs. 3.5 billion from PAYE tax, Rs 222million from employees and Rs. 2710 million from individuals as income tax. He noted that his immediate priority is to collect arrears of income tax amounting to six billion rupees. Over the past two decades, tax evasion is known to have deprived the country and the people of billions of rupees despite corrective action by various governments. Therefore he said that an effective plan should be implemented to nab tax and VAT defaulters who had been defrauding the department. In the meantime genuine tax payers including corporate directors will be encouraged to pay their dues by providing them with attractive package of concessions, he said. One such incentive is the presentation of gold cards to genuine tax payers. Genuine tax payers have been given a concession to bring down vehicles at reduced import duty. Angammana noted that he has already instructed tax officers not to adopt rough tactics to recover taxes but to strictly adhere to the normal recovery process of sending reminders etc and to take legal action as a last resort. According to investigations, big-time business operators and wheeler-dealers in areas like the arms trade are not the only tax dodgers. Other big-time tax dodgers are known to include some in the highly-respected medical and legal professions as well as engineers and private tuition masters, he added. He pledged that he will take every possible step to bring a human face to the Inland Revenue Department changing its present image of a ‘demon’.Outlining his plan to streamline VAT collection procedure, Angammana said that a special monitoring unit will be set up to oversee the VAT collection froexporters as this task has been vested in the Sri Lanka Customs on behalf of IRD .

The Inland Revenue department collects VAT from service providers and manufacturers only. The whole system will be strengthened avoiding loopholes in the VAT refunding procedure, he said. A special audit force has been set up to check the payments of VAT refunds and connected matters. All cheques payable to relevant individuals would be sent to them by registered post and no cheque wouldbe hand delivered. He also noted that due to lack of feedback from customers several problems regarding the VAT refund had arisen and added that it had been solved as Inland Revenue was linked with Customs Department. He said divisional InlandRevenue offices, which would register and open files for new tax and VAT Payers, would also be increased within the next three years in order to accrue more revenue to the department.

Briefing on the modernization and automation programme which he intends to implement with the assistance of the Finance Ministry, Angammana noted that the proposed ADB funded project will promote the institutional strengthening of the Inland Revenue Department, through the procurement of an integrated Revenue Administration Management Information System (RAMIS) and ancillary equipment, respectively. RAMIS, will, in turn, link with the Information Technology (IT) systems for financial management in the areas of treasury, payment, expenditure, and budget programming, he said. This project aims to help the department develop an electronic organization system and ensure that the standard is maintained on an ongoing basis. He added that his intention is to introduce a central automation system forrevenue collection in Sri Lanka similar to e- filing on line system adopted in Singapore to streamline revenue collection procedure as the department alone cannot afford it due to lack of competent IT professionals and other required resources.