Govt. in desperate bid to collect tax arrears running into billions of rupees

The all-party Committee on Public Accounts (COPA) has directed the Inland Revenue Department to take all possible measures to collect tax arrears running into billions of rupees. In the absence of COPA Chairman Prof. Tissa Vitharana, Dr. Harini Amarasuriya, JVP member of Parliament, chaired its recent proceedings.

Dr. Amarasuriya told the Inland Revenue Department to submit a report within two to five months on taxes and penalties in default to be recovered.

The following is the text of a statement issued by the Communications Department of Parliament: “COPA directed the Inland Revenue Department to submit a report within two to five months with regard to the Taxes and Penalties in default to be recovered from tax payers without any complications and the amount where recovery is possible but contains considerable issues.

The directive to submit the report pertaining to the amount of Taxes and Penalties to be recovered without any complications related to the Legacy computer system owned by the Inland Revenue Department and the amount where recovery is possible but contains considerable issues was made by Member of Parliament Dr. Harini Amarasuriya who served as the acting Chairperson of the COPA Committee.

The acting Chairperson further instructed the department to submit a report to the Committee within five months on the amount of Taxes and Penalties in default to be recovered without any complications in relation to the RAMIS computer system and the amount where recovery is possible but contains considerable issues.

According to the Legacy system, Rs. 18 billion had been identified as tax arrears of the identified companies as at 30.03.2021, and it was disclosed that it was 17 percent compared to the total outstanding revenue of Rs. 107 billion as at June 30, 2020.

According to the RAMIS system, Rs. 87 billion had been identified as tax arrears of the identified companies on 30.03.2021 and it was disclosed that it was an increase of 47.5 percent compared to the total outstanding revenue of Rs. 183 billion as at June 30, 2020.

The Committee informed the Inland Revenue Department that all arrears pertaining to the Legacy System should be recovered expeditiously and action should be taken to end the functions of the system.

The Committee had earlier instructed the Ministry of Justice to implement a program to expedite the proceedings in the courts regarding the recovery of tax arrears and the process on this regard was taken into review.

The Ministry of Justice informed the Committee that the matter has been discussed with the Judicial Service Commission and that a proper mechanism is currently underway to expedite cases in the court proceedings regarding the recovery of tax arrears.

State Minister Dr. Sudarshini Fernandopulle, Members of Parliament Tissa Attanayake, Niroshan Perera, Dr. Upul Galappaththi and B.Y.G Ratnasekera marked their attendance at this COPA Committee Meeting which was held to review the progress of the implementation of the directives given during the discussions held on January 06th 2021 and March 10th pertaining to the Special Audit Report Taxes and Penalties in Default to be Recovered from Taxpayers.”