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| Sunday, 19 October 2003 |
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Revenue Authority No retrenchments on the cards by Hiran H. Senewiratne Establishing the Revenue Authority will not result in retrenchment or removal of employees attached to the Department of Customs, Excise and Inland Revenue as alleged by some sectors, assures the Government.
"We will not leave room for removal of any employee in those three bodies at any cost," said Deputy Minister of Finance Bandula Gunawardena. He said that once it is set up, the Government intends to render many benefits to employees. We plan to have about 5000 employees in all three entities. It is absurd to have any doubt about job security," Gunawardena said. The Revenue Authority, once established, will monitor the activities of the three entities which will result in improved efficiency and coordination and a saving of Rs 600 million for the State coffers. As a result of the three revenue departments coming under an umbrella organisation, the entire tax structure will be streamlined, a Government spokesman said. The Government is presently discussing with trade unions and other relevant authorities to come to a final solution on the proposed Revenue Authority Bill, a Finance Ministry spokesman said. Need for tax reforms Even the International Monetary Fund has stressed the need for tax reforms due to the reduction in tax income, which had shown the importance of regularisation of Customs, Excise Controls and Inland Revenue to attract private Foreign Direct Investment. The proposed Revenue Authority will be under the jurisdiction of the Finance Minister. However, the Authority officials will be appointed by the Constitutional Council. The Secretary to the Ministry of Finance will be its Chairman, a top Government spokesman said. The proposed Revenue Authority will help avoid tax defaults, tax anomalies and other tax-related problems to a greater extent, said Minister Gunawardena. "We will be able to increase the Government's tax revenue between 18 per cent and 20 per cent with the establishment of the Revenue Authority," said Gunawardena. He said that 81 per cent of the total revenue come from these three bodies, while the balance 19 per cent is collected by way of non-tax revenue. He said: "Members of the Authority will be prominent people in the country with clean track records, to maintain transparency in all its activities". Minister Gunawardena also said that the idea of establishing a revenue authority was first proposed by President Chandrika Bandaranaike Kumaratunga during her tenure as Finance Minister during the previous government. Director General Sri Lanka Customs C.S.W. Jayatilake said the system will enable coordination with the other two bodies specially for the purpose of exchanging information. He said that working closely with other bodies will ease out most problems and irregularities like combating tax evasion, exchanging information on import and export and other tax-related issues. All three bodies will run independently, but will be managed by the Revenue Authority, which will prevent undue influence from any third party. Over-taxation He said that once the authority is established the inter-connectivity of refunds of over-taxation specially VAT can be minimised. Jayatilake also said that at present Customs cannot recruit professionals nor expertise to the department due to the rigid procedures of the government. Once it is managed by a competent authority, it can hire professionals to the organisation. Currently there are between 2000-2200 employees at Customs. "We are doing a professional job, therefore we need a lot of professionals to perform the task," said Jayatilake. According to last year's figures, Sri Lanka Customs has collected Rs 132 billion, which is nearly 50 per cent of the country's total tax revenue. With the proposed system, Sri Lanka Custom can be further strengthened not only by infusing new technology, but also through quick decision making. "Technology is changing, but we cannot change since we are a government entity. Even important decisions cannot be taken quickly as we have to adhere to Cabinet procedures or Ministerial procedures," Jayatilake added. The Customs chief also said that by strengthening these revenue bodies, the country could recover more money than at present. Commissioner General Inland Revenue K. Suseelar said: "The whole idea behind this move is to give flexibility to the administration process. This will enable the Inland Revenue Department to absorb professionals free from the Government's administrative service recruiting procedures." He said the Department has to work according to the national budgetary policies, which is one of the drawbacks to expand and improve its services. We also need a lot of infrastructure development, he added. Suseelar also said that now they have to seek assistance from relevant Ministries to recruit staff which is a very slow and time consuming process. According to the DIR, there are more than 1600 employees. Some functions of the three organisations such as accounting methods, Information and Communication Technology and general adminstration are duplicated. Therefore, bringing the administration under one body, will improve the efficiency in no time, he added. Once established, the Government will allocate a certain percentage from tax recoveries as commission to the DIR to run the organisation. "This commission will be obtained for the purpose of running the body, which will be allocated based on the performance. Therefore, the more we perform, the more funds we can obtain to the entity," he said. According to DIR statistics, nearly 40 per cent of the country's total tax revenue is met by the Department, which was Rs 137 billion last year. Commissioner General Excise Department Parakrama Ekanayake Bandara said that it will definitely put the organisation in the driving seat. Only alternative He said that this is the only alternative to increase the efficiency level of the Excise Department. Ekanayake Bandara also said that his organisation has basic infrastructural deficiencies, which needs to be addressed with immediate effect. Therefore, he welcomed the idea to create a better entity. According to the Department, 10 per cent of the total tax revenue come to the Government coffers from the Excise Department, which is Rs 8663 million according to last year's figures. He said the department investigates more than 50,000 excise cases a year. He said the Department can increase its operations by 25 per cent if they obtain more funds and resources. by establishing an apex body to overlook its operation without a burden to the government coffers, better results could be produced, said Ekanayake Bandara. JVP Anuradhapura District MP D.K Lalkantha said establishing an Authority to monitor all three bodies will have a negative impact on the independence of all three bodies. He said the only alternative would be to improve the current management structures and infuse the latest technologies to increase the efficiency level. |
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