IRD eyes those who evade taxes
View(s):By Raj Moorthy
Although the total number of registered taxpayers increased by 130 per cent in 2023, from a low base, the Government through the Inland Revenue Department (IRD) has taken measures to help broaden the tax compliance to ensure that all those who ought to be paying tax, are indeed paying tax.
Speaking at the launch of the ‘Tax payer perception’ report recently held at the Galadari Hotel in Colombo, State Minister of Finance Shehan Semasinghe outlined some key administration measures taken by the government to improve the tax base.
He said, “One element of tax perception that requires significant attention is the perception that there are many people who evade tax. This perception directly inhibits taxpayer morale and further weakens compliance. The government has taken many steps to address this through a concerted effort to improve tax administration and compliance.”
The key tax administration measures includes implementing version 2.0 of the Revenue Administration and Management Information System (RAMIS) at the IRD, introducing measurable key performing indices for the IRD on payment, filing, reporting, and registration under the IMF’s extended fund facility programme, establishing a high wealth individuals unit, design and monitoring unit, and a strengthened risk management unit within the large taxpayers unit at the IRD to ensure on-time filing and payment, introducing modern risk-based audits for large taxpayers at IRD.
It also involves development of risk management capabilities of Sri Lanka Customs by developing a sophisticated software solution – the project goals include enhancing risk assessment for revenue risks, improving operational efficiency in customs clearance, ensuring compliance with regulations, and creating a sustainable, adaptable software system for future needs, strengthening information sharing between IRD, Registrar General’s Department, Department of Register of Companies, Department of Motor Traffic, government procuring entities, financial institutions, and Colombo Stock Exchange.
Mr. Semasinghe also highlighted measures that will be implemented over the medium term. Revising the value added tax (VAT) refund system to fully repeal the Simplified VAT system in 2025, implement a VAT compliance improvement programme, minimize temporary VAT registrations through interlinkages between IRD and Sri Lanka Customs to reduce revenue leakages, among other steps.
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