Shocking lapses in revenue collection revealed

COPA concerned over Rs. 7.5 bn spent on upgrading integrated computer system 

By Shamindra Ferdinando 

Parliamentary watchdog-COPA (Committee on Public Accounts), in its latest report has highlighted significant loss of revenue and misuse of public money caused by the failure on the part of the Department of Inland Revenue, Sri Lanka Customs and Department of Excise to streamline their operations.  

COPA Chairman Prof. Tissa Vitarana presented his first report to Parliament on July 20. The COPA consists of 22 members representing both the government and the Opposition. The COPA report dealt with the Auditor General’s reports on Department of Inland Revenue, Sri Lanka Customs and Department of Excise. 

Pointing out that as at July 31, 2020, there had been 281 vacancies (10 percent of the approved cadre), the all-party committee asserted that failure to fill 183 senior level vacancies in the Inland Revenue Department would hinder the smooth functioning of the institution.  

COPA has questioned the failure on the part of Sri Lanka Customs to recruit a suitable person to the post of Legal Officer. The vacancy hadn’t been filled in spite of the Management Services Department approving the creation of the post, it has pointed out. 

COPA has observed that the Excise Department, too, in spite of receiving approval from the Management Services Department on June 30, 2020 failed to recruit a legal officer though it being an essential post. There had been 35 senior and 66 tertiary level positions among altogether 292 vacancies in what the watchdog committee called a vital part in overall revenue collection mechanism. 

Asserting that the three above-mentioned institutions were responsible for the collection of 90 percent of government revenue, COPA alleged that the continuing failure to streamline operations contributed to corruption. It faulted these institutions for allowing what it called private parties to misappropriate public funds.

Former COPA Chairman and incumbent member lawmaker Lasantha Alagiyawanna yesterday (28) said that tangible measures were required to ensure proper collection of revenue. Acknowledging irregularities had undermined the whole process, the SLFPer explained how those responsible for revenue collection manipulated the system for their benefit at the expense of the national economy.

State Minister of Co-operative Services, Marketing Development and Consumer Protection Alagiyawanna said that the continuing registration of vehicles imported for a particular purpose as dual purpose vehicles was nothing but a crime. Lawmaker Alagiyawanna said that in spite of interventions made by parliamentary watchdogs, COPA, COPE (Committee on Public Enterprises) and COPF (Committee on Public Finance) the situation remained quite unsatisfactory.

Responding to another query, lawmaker Alagiyawanna said that relevant ministers should take remedial measures.

COPE member Dr. Harsha de Silva yesterday said that the government revenue was now at a paltry 9.2 percent of the GDP (Gross Domestic Production). One-time non-cabinet minister de Silva said that perhaps it was one of the lowest in the world. 

Vitarana’s outfit has recommended urgent amendments to Acts pertaining to the Inland Revenue Department as well as Sri Lanka Customs to facilitate the revenue collection process. As regards Sri Lanka Customs and Motor Traffic Department, COPA underscored the urgent need to amend relevant Acts as existing laws seriously hindered revenue collection procedures. COPA also called for modification of existing laws pertaining to the Excise Department to enable the institution to achieve its primary objectives.

Pointing out that a vast sum of money had been spent on developing integrated computer systems, COPA underscored revenue collection mechanisms that couldn’t be perfected without the availability of such methods. COPA called for the development of what it called a National Coordination Plan meant for strengthening of the revenue collection process.

COPA revealed that a staggering Rs 4 bn had been spent so far on modifying/updating the system at the Inland Revenue and a further Rs 3.5 bn was required to complete the work. The 22-member COPA has expressed serious concern over the large amount of funding made available to still unfinished project.