by Saman Indrajith

The Inland Revenue Department’s deficit in terms of revenue was Rs. 1.3 trillion in 2018, it was revealed before the Committee on Public Accounts (COPA) held in Parliament on Thursday under the chairmanship of Prof. Tissa Vitarana.

Officials representing the department said the substantial loss of revenue was due to most government institutions defaulting on their payments and an independent board has determined that some of these institutions are still not in a financial position to pay their dues.

The Committee asked the department to submit a full report on the institutions.

The Auditor General’s Department pointed out that another reason for this substantial deficit of revenue was due to 8,060 dishonored cheques worth Rs. 3 billion. The Inland Revenue Department officials said a blacklist including 65 taxpayers has already been prepared.

The Inland Revenue Department was summoned before the Committee on Public Accounts and presence was marked of a number of Ministers, MPs, Secretary to the Treasury and Ministry of Finance, Dr. S. R. Attygalle, Commissioner-General of Inland Revenue, C. P. J. Siriwardena and many high-ranking officials of the Inland Revenue and Auditor General’s Departments.

Officials said that since the beginning of 2017, the Inland Revenue Department has utilized a computerized system called RAMIS to streamline the tax collection process, which has proven to be more efficient than handling the work manually.

However, MPs pointed out that it was problematic that more than Rs. 3 billion has to be paid to the Singaporean company, which developed the RAMIS system at a cost of over Rs. 4 billion, every time a tax amendment is made.

Minister Duminda Dissanayake suggested that an agreement on tax amendments should be reached for a one-time payment mechanism with the company.

Secretary to the Treasury and Ministry of Finance, Dr. Attygalle pointed out that a five-year continuous, consistent tax policy was proposed in the last budget for the practical convenience of taxpayers as well as tax collectors.

According to the officials, there are 2,192 big time taxpayers in Sri Lanka, of which 532 contribute towards the payment of 70.2% of tax revenue.

Minister of State Lasantha Alagiyawanna, Duminda Dissanayake and Members of Parliament Tissa Attanayake, Gunapala Ratnasekera, Weerasumana Weerasinghe, Prof. Ranjith Bandara, Ajith Rajapakse, S. Shritharan and Harini Amarasuriya were present at the meeting.