News
IRD spells out issues in collecting revised revenue target
The Inland Revenue Department (IRD) has cautioned the Treasury that it will not be able to collect the revised revenue target set at Rs 1,667 billion by the end of the year due to a range of issues faced in the collection of taxes.
IRD officials who have met with Treasury officials in the presence of an International Monetary Fund (IMF) representative have pointed out a string of difficulties in facing the new revenue target to be achieved in the next five months, a senior IRD official said.
He said the IRD had so far collected a revenue of around Rs 700 billion and the revised target set out in consultation with the IMF would require the target to be raised by another Rs 1000 billion.
Among the issues faced in reaching the revenue target have been lack of staff, lack of infrastructure and finances to open new tax files, shortage of funds on creating awareness on tax collection, and the possible overloading of work on the staff with other implications.
The IRD officials had claimed that the Department had a strength of nearly 900 persons and was already short of the required cadre. Therefore handling some 1.2 million new tax files would be impossible. They had said nearly Rs 200 million would be required for the opening of new files, conducting seminars islandwide for officials and other professionals, and for the media campaign among other expenses.
The delay in recruiting 71 tax officers for which exams have already been held has also been pointed out as a reason for the inability to meet the target.
A senior IRD official said that they could not reach a solution to the issues at the meeting.
A senior Treasury official said attention had been drawn to the issues faced at the meeting to discuss the revenue targets.
Sri Lanka must achieve debt restructuring by the IMF’s first review due in September to receive the next tranche from it. On March 20, the IMF extended a nearly $3 billion bailout facility to Sri Lanka and released the first tranche soon after.
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