IRD to freeze 900 high tax defaulters’ accounts
Sri Lanka’s key revenue agencies Inland Revenue, Customs, and Excise Departments have collected Rs.1,680.2 billion in the first half of the year, representing 44 per cent of the expected revenue, showing some progress.
However, tax exemptions totalling Rs. 978 billion and an inability to collect over Rs. 1 trillion have led to a significant Treasury loss of approximately Rs. 2 trillion, according to Patali Champika Ranawaka, Chairman of the Ways and Means Committee.
In response, the Inland Revenue Department issued around 900 notices to freeze the bank accounts of tax defaulters in an effort to recover outstanding taxes.
He emphasised the importance of this measure, noting that while there are about 13 million eligible taxpayers aged over 18, only 5 million have been issued Tax Identification Numbers (TINs).
There is a directive to issue TINs to the remaining eligible individuals by year-end, but a challenge remains in integrating TINs with other government identification systems, such as driving licenses.
The committee also identified significant issues within customs invoicing, including under-invoicing, over-invoicing, and ghost invoicing, all of which hinder proper tax collection.
Notably, 65 per cent of imported goods, particularly food items, enter the country under a temporary scheme, which was initially justified during a time of food shortages and dollar scarcity.
However, the continued use of this scheme is now resulting in an annual loss of approximately US$ 4 billion, surpassing Sri Lanka’s balance of payments deficit.
Additionally, the Customs Department has enforced penalties on gold imports, collecting Rs. 1.2 billion from six out of 10 investigated businessmen, although further taxes remain outstanding. This regularisation process has contributed an additional Rs. 10 billion to state revenue this year.
The Excise Department reported uncollected taxes totalling Rs. 7.9 billion, with significant amounts owed by 10 distillery companies.
Despite repeated warnings to revoke licenses and recover these taxes, the Excise Department claims it cannot act without direct orders from the Ministry of Finance.
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!