Centralised data base to nab tax evaders
The Inland Revenue Department (IRD) is setting up a centralised
database of the business population to identify organisations and people
who could be taxed.
A proper data base will be a useful tool to increase tax collection.
The survey to gather database information was conducted during the ‘Tax
Week’ from March 14 to 18, Commissioner General of Inland Revenue,
Kalyani Dahanayake told Sunday Observer Business.
“We have no proper data relating to businesses except the data
available at the Registrar of Companies, and the data of returns and
information in our department internally.
We hope to develop a database with correct information through this
survey. It is difficult to find accurate data about businesses and those
who pay tax and those who do not,” she said.
The officers of the department were deployed to fulfil this task last
Although taxes are the key source of government revenue, Sri Lanka’s
tax-to-gross domestic product (GDP) ratio is about 11 percent, which is
not satisfactory with peer countries raising around 25% of the GDP
Over the next few years the government hopes to increase the
tax-to-GDP ratio to 15%.
The revenue collection targeted this year is Rs. 680 billion
including Rs. 512.7 billion as domestic taxes and the balance through
the Customs (VAT and NBT).
Commissioner Dahanayake is confident of achieving the tax collection
target this year. “We have created a tax-payer friendly environment
within the department and we encourage voluntary compliance while
deterring tax evasion and tax avoidance.
“People should volunteer and pay their share of tax as the money is
necessary to develop the country and provide infrastructure, health and
education facilities free to the people.
We are a very fortunate people - which other country would provide
such essential services at no cost?” she queried.
She said analytical studies should be done to find out why the
tax-to-GDP ratio is going down. However, it is said that forty percent
of the population live on subsidies provided by the government.
“That’s a major issue for the economy. We have to create conditions
where people can live without subsidies, then tax revenue could be used
for more development rather than being spent on subsidies.
On the other hand with such improved conditions, there will be more
taxpayers to contribute to the economy,” she said.
Any information on taxes can be obtained by calling 1944