COPA calls for report of tax evading institutions by 31 March

• IRD Chief says tax evaders using slow legal process to delay paying dues
• COPA calls for report by 31 March with names of tax evading institutions and due amounts

Commissioner General of Inland Revenue H.M.C Bandara told a Parliamentary Committee that billions of rupees in tax arrears for many years could not be recovered due to the lengthy judicial process and delays in the courts.

He told a recent meeting of the Committee on Public Accounts (COPA) that tax evaders are taking advantage of the delay in the judicial process to delay their payments.

COPA Chairman Prof. Tissa Vitharana emphasised the need to expedite the court process to recover the arrears and prevent such delays and said officials of the ministries of Justice and Finance and the Inland Revenue Department (IRD) will be summoned to discuss the matter shortly.

Prof. Vitharana further stated that the tax system should be streamlined, and all necessary steps should be taken to change the law if necessary.

The COPA meeting was held to review the progress of tax and penalty collection.

It was revealed at this meeting that the tax files pertaining to the tax period up to 31 December 2015 are under the control of the ‘Legacy’ computer system, and from 1 January 2016 under the ‘RAMIS’ computer system.

The Committee pointed out that according to the report, the amount of tax that can be recovered by these systems is not the actual amount of tax that can be recovered. Therefore, the Committee informed the Inland Revenue Department that this should be resolved as there is an issue with the accuracy of the list prepared as arrears taxpayers.

The Committee directed that a report be submitted by 31 March showing the leading institutions among the tax non-payers and their tax arrears.

The Committee also directed the IRD to expedite the recovery of arrears of taxes and fines, as only Rs. 224 million has been recovered out of the Rs. 107 billion tax due under the ‘Legacy’ computer system.

The Committee also pointed out the importance of merging institutions, including the Department of Motor Traffic, Land Registry Office with the IRD for the tax collection process. Officials of the IRD said that 29 such institutions have been identified thus far and COPA Chairman Prof. Vitharana said that the IRD and other agencies will be reconvened to discuss the matter.

State Minister Lasantha Alagiyawanna, Members of Parliament Tissa Attanayake, Niroshan Perera, Mohamed Muzammil, S. Sridharan, Dr. Upul Galappaththi, B.Y.G Ratnasekera, Weerasumana Weerasinghe along with a group of Government officials were present at the meeting.