The Commissioner-General of Inland Revenue H.M.C Bandara recently disclosed in Parliament that billions of rupees in tax arrears for many years could not be recovered due to the lengthy judicial process and delays in the courts.
During a recent meeting of the Committee on Public Accounts (COPA), it was also revealed that tax evaders are taking advantage of delays in the judicial process to delay their payments.
The meeting, convened to review the progress of tax and penalty collection, was chaired by Prof. Tissa Vitarana.
The committee has emphasized the need to expedite the court process to recover the arrears and prevent such delays. The committee further said that the Ministry of Justice, the Ministry of Finance and the Inland Revenue Department will be summoned soon to discuss the matter.
COPA Chairman Prof. Vitarana has noted that the tax system should be streamlined and all necessary steps should be taken to change the law if necessary.
It was further revealed that the tax files pertaining to the tax period up to December 31, 2015, are under the control of the "Legacy" computer system and from 01st January 2016 under the "RAMIS" computer system.
According to the report, the amount of tax that can be recovered by these systems is not the actual amount of tax that can be recovered, the COPA pointed out.
Hence, the Committee has informed the Inland Revenue Department that this should be resolved since there is an issue with the accuracy of the list prepared as arrears taxpayers.
The Committee has directed that a report be submitted by March 31, showing the leading institutions among the tax non-payers and their tax arrears.
The Committee also directed the Inland Revenue Department to expedite the recovery of arrears of taxes and fines as only Rs. 224 million has been recovered out of the Rs. 107 billion tax due under the Legacy computer system.
State Minister Lasantha Alagiyawanna, MPs Tissa Attanayake, Niroshan Perera, Mohamed Muzammil, S. Sridharan, Dr. Upul Galappaththi, B.Y.G Ratnasekera and Weerasumana Weerasinghe as well as a group of government officials were present at the meeting.