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| Sunday, 24 July 2005 |
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Mafia group sabotages IRD reforms : IRSOA response President of the Inland Revenue Staff Association (IRSOA) of the Inland Revenue Department (IRD) K. Dharmasena has sent a letter regarding our article in the Sunday Observer Business on July 17 titled "Mafia group sabotages IRD reforms- Government unable to achieve set revenue target". The letter which has been abridged due to lack of space says; "Whole contents of the article are incorrect and misleading. The article has caused immense embarrassment and greater insult to the genuine and reputed staff officers in the IRD. There are several institutions to make complaints if government officers are corrupt or take bribes. It is very pathetic and third class action to make these type of statements in public," Dharmasena states. Dharmasena said that a proposal was discussed to increase the cadre of all stages of the IRD at the meeting held on May 30 at the Ministry of Finance and no decision was taken because the Minister or Secretary alone cannot decide on the cadre of the IRD. The assessors and tax officers are not recruited under the same qualifications. Only class graduates are recruited as assessors. Hundred percent tax audit cannot be done because it contradicts the principles of the voluntary tax compliance system and it will be a greater barrier to the voluntary compliance to the tax law. Audit of returns should be kept as a tool which is to be used in extraordinary circumstances to get more compliance and not as a revenue generating instrument. Dharmasena also says that tax revenue cannot be increased by 95% by proper tax auditing and only less than 5% of the revenue has been collected by auditing of tax files. The IRSOA has never objected to the increase of cadre of the IRD. According to the revenue figures released by the Finance Ministry and published in the Daily News on July 13, government revenue has swelled by 22% in the first half of 2005. Therefore the heading of the article is incorrect and misleading the general public. Editor's Note: We did not mention IRSOA or any trade union or group of officers specifically and said they are responsible for the charges raised by the Inland Revenue Service Union (IRSU). However, we spotlighted that a mafia type group of IRD officials is plotting against the proposed reforms and we are surprised about the IRSOA's reaction. The corruption charges of the IRSU is not new and it is not a public secret that all tax collecting institutions of the country are rampantly corrupt. There is enough evidence for this and the Rs.3.87 billion tax fraud in the IRD reported recently is one of them. However, we accept that there are still genuine officers in the IRD and all these institutions. Our article is not about the slight difference between honours graduates and general graduates and we merely said that the tax officers can also be used effectively in tax collection and auditing. IRSOA has not denied the inadequacy of assessors. We also did not state that a 100 percent tax auditing is required. It is patently clear that 4% tax auditing is extremely insufficient. It was proved by the Tax Amnesty Bill and after the tax amnesty was granted over 50,000 declared their hidden revenue. It should be increased to at least 30-40%. The IRSU has confirmed that nearly 95% of tax income increased after auditing a tax file. |
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