News
IRD’s faulty online system dampens trillion-rupee target set for next year
View(s):- By Damith Wickremasekara
Uncertainty hangs over the Inland Revenue Department’s tax collection targets for 2023 due to a faulty online system.
The IRD has sought Treasury approval to upgrade an online Revenue Administration system costing Rs nine billion despite a cloud over the programme for the past eight years.
With a one-trillion-rupee revenue target set for the Department, officials have pointed out a string of shortcomings in the system that might fail to generate the expected results.
Among the shortcomings identified in the system are failure to generate tax notifications, inability to obtain information on default of tax and Tax Credit, inability to obtain reports according to requirements and difficulties in failure to match inputs and outputs for calculation of the Value Added Tax.
A Singaporean firm has requested Rs nine billion to upgrade the programme known as the Revenue Administration and Management Information System (RAMIS).
A senior Treasury official conceded that RAMIS had been introduced without a proper feasibility study and the expected targets could not be achieved.
He said the Treasury had called for a review of the system and sought a report from the IRD.
The officials said that with changes in the tax systems and revisions, the government was being forced to pay high sums for the upgrade.
“We expect proposals from the IRD on the future of the system. The failure to make a review and take appropriate action would be a waste of money,” he said.
The Inland Revenue Service Union has made representations to the Treasury claiming that the RAMIS introduced in 2014 and implemented in 2016 had failed to achieve the desired results and called for the development of a local system which would cost less.
The unions have put forward a set of proposals, in the event the Department wants to continue with the system. They have suggested that an expert committee be appointed to identify the shortcomings and make proposals to rectify them with the IRD officials themselves taking over the administration of the system.
An estimated Rs eight billion has already been spent on the system without gaining benefits from it.
The department is currently handling about 700,000 files manually due to these shortcomings while VAT files have been piling up.
Trade union leader H.A.L. Udayasiri told the Sunday Times that it would be difficult to reach the new target of Rs one trillion tax collection without a proper system in place.
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