IRD now receives police information to catch wealthy non taxpayers

The Inland Revenue Department (IRD) is to receive information from the police to catch the wealthy non taxpayers into the tax net in accordance with a recent directive issued by the Inspector General of Police.

According to a circular issued by the IGP, financial data relating to complaints of frauds or disputes with regard to over Rs. 5 million received by police stations should be submitted to the IRD.

This will enable the tax officers to conduct investigations into the wealth of persons and how they have earned it and recover taxes from them trapping them into tax net, senior Finance Ministry official told Times online.        

The IRD collects data from several agencies and manually examines and compares this to find tax evaders and eligible rich persons for tax payment by sharing these financial data.

Customs and Excise departments are also used to share information with the IRD, on import duty and other taxes they collect.

The Registrar of Companies and the Registrar of Motor Vehicles send records of new companies and vehicle purchases each month, he disclosed.

“We get import data from Customs daily, but it takes a month for us to compare it with other data. And by the time we decide to investigate, the relevant persons get sufficient time to hide their financial records,” an IRD Assistant Commissioner said.

The IRD also receives vehicle leasing data from finance companies. When expensive vehicles change hands, tax investigators again cross-reference their own database. The same applies for land transactions in which cases the Land Registry shares information with the IRD.

Tax officers track down possible tax evaders, but collecting sufficient proof is difficult, he said adding that banks are not authorised to share information with the IRD without a court order, he disclosed.