…building rented at over 5 mn not used

By Shamindra Ferdinando

The Committee on Public Accounts (COPA) has questioned the failure on the part of the Inland Revenue Department to use a building at Colpetty rented at a cost of Rs.5.08 mn.

According to the first COPA report handed over to Parliament, on July 20, by the watchdog’s Chairman Prof. Tissa Vitarana, the Inland Revenue Department abandoned plans to set up ‘Tax Services Division’ due to strong objections by employees.

COPA comprises Prof. Vitarana, Udaya Gammanpila, Duminda Dissanayake, Dayasiri Jayasekera, Lasantha Alagiyawanna, Dr. Mrs Sudarshini Fernandopulle, Shehan Semasinghe, Prasanna Ranaweera, Tissa Attanayake, Harin Fernando, Niroshan Perera, Faizal Cassim, Ashok Abeysinghe, Buddhika Pathirana, Kader Masthan, Mohammed Muzammil, Sivagnanam Shritharan, Dr. Upul Galappalaththi, B.Y.G. Ratnasekera, Weerasumana Weerasinghe, Prof. Ranjith Bandara and Dr. Harini Amarasuriya.

In response to COPA inquiries, the Inland Revenue Department has claimed that the building rented to store documents as part of the expansion of the Tax Services Division couldn’t be utilized for want of employees’ cooperation.

Expressing serious concerns over the development, COPA termed the transaction misuse of public funds.

The report dealt with a spate of serious shortcomings, misappropriation of public funds and perhaps some sections of the Inland Revenue Department, Sri Lanka Customs and Excise Department colluding with interested parties.

The report also exposed the utterly irresponsible conduct of the State Engineering Corporation (SEC) as regards a finalized agreement to build a 9 storeyed vehicle park at a cost of Rs 1,430.5 mn for the Inland Revenue. Of that amount, Rs 1,399.7 mn had been paid to the SEC by Dec 31, 2018 without paying attention to progress. The report revealed that the SEC had awarded all work to private sub-contractors although the state enterprise accepted the contract.

The Inland Revenue has taken up the position that a state institution couldn’t initiate legal action for violating an agreement. However, the COPA hasn’t made remedial measures to address the issue at hand. Prof. Vitarana told The Island that the matter needs careful consideration particularly at a time the country was experiencing a severe financial crisis.

The senior LSSPer who received SLPP National List appointment said that since the last parliamentary election the COPA and two other parliamentary watchdogs- COPE (Committee on Public Enterprises) and COPF (Committee on Public Finance) had raised a number of pertinent questions.  The Parliament should take tangible measures to rectify inadequacies in the revenue collection systems, curb waste, corruption and irregularities and also negligence, the veteran politician stressed.

The COPA report on the basis of submissions made those responsible for revenue collection acknowledge further complications caused by the raging Covid-19 epidemic. However, closer scrutiny of the report revealed that the entire tax collection system had been in turmoil even before the eruption of the epidemic here in early 2020.

COPA pointed out that in spite of the setting up of a special division in terms of the Default Taxes Payment (Special Provisions) Act No 16 of 2010, recovery of taxes had been unsatisfactory. The watchdog has observed by December 2018, eight years after the setting up of the special division arrears in taxes and fines amounting to Rs 32.5 bn were yet to be collected. Referring to Rs 32.5 bn, COPA largely faulted government institutions for the non –payment of taxes while quoting the relevant Inland Revenue official as having said that an Independent Advisory Committee established to deal with recovery of defaulted taxes directed that defaulters given an opportunity to pay arrears in installments.

Former COPA Chairman Lasantha Alagiyawanna admitted that in spite of disclosures made by not only COPA but other parliamentary watchdogs as well over a period of time corrective measures hadn’t been taken. According to the SLFPer, relevant ministers were answerable for whatever the shortcomings and discrepancies taking place under their watch.