Inland Revenue Department requests condo owner information bypassing due process

The Inland Revenue Department has written to apartment management companies seeking information regarding owners and residents of the condominium properties to identify individuals who might be evading taxes and avoiding due process to collect such data.

The move to request information from apartment management companies about condominium property owners and residents in Colombo has sparked controversy and raised ethical concerns. 

According to sources, the Inland Revenue Department sent formal letters to apartment management companies in the city, asking for details about the owners and residents of the condominium properties, to identify individuals who may not be fulfilling their tax obligations and ensure their inclusion in the tax net.

The department has claimed that boosting tax revenue is crucial to navigating the current economic crisis, prompting them to seek out individuals who might be evading taxes.

However, this move has drawn criticism from communities who deem it ‘unethical’. 

They argue while increasing tax revenue is important for the country’s recovery, the methods deployed by the department raise concerns about privacy and due process. 

Some have expressed worries that the request for individual information might infringe upon citizens’ rights.

The Inland Revenue Department defended its actions, stating that the information request is aligned with administrative provisions outlined in section 123(1) of the Inland Revenue Act No. 24 of 2007.

The move has called for a broader debate about the balance between effective tax enforcement and respecting citizens’ rights to privacy. This section likely pertains to the department’s authority to collect and use data for tax-related purposes. Nonetheless, individuals and privacy advocates remain wary of the potential misuse of personal data.

The move is also to shore up tax revenue in line with targets set by the International Monetary Fund (IMF) under its $ 3 billion Extended Fund Facility program. 

During the six months ending June 2023, the Government revenue and grants had increased to Rs. 1,317 trillion in comparison to Rs. 919.5 billion recorded in the corresponding period of 2022, the Central Bank has announced. Tax revenue amounted to Rs. 1.19 trillion as against Rs. 799 billion in 1H of last year. However non-tax revenue was down to Rs. 116 billion from Rs. 120 billion.