Meeting of Committee on Public Accounts Billions of rupees in tax arrears not recovered due to lengthy judicial process

• Tax evaders are taking advantage of delays in the judicial process to delay their payments

By Yohan Perera   

The Commissioner General of Inland Revenue H.M.C. Bandara recently revealed during the meeting of Committee on Public Accounts (COPA) 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, Parliament Media Unit which quoted COPA said yesterday.  

It was also revealed at the meeting that tax evaders are taking advantage of delays in the judicial process to delay their payments. 

The committee emphasised the need to expedite the Court process to recover the arrears and prevent such delays, and said that the Ministry of Justice, the Ministry of Finance and the Inland Revenue Department will be summoned soon to discuss the matter.  

The COPA chairman Prof. Tissa Vitarana, further stated that the tax system should be streamlined and all necessary steps should be taken to change the law if necessary.  

It was revealed at this meeting 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.   
The Committee pointed out that 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. Therefore, the Committee informed the Inland Revenue Department that this should be resolved as there is an issue with the accuracy of the list prepared on arrears tax payers.  

COPA directed that a report be submitted by 31.03.2021 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.  

The importance of merging institutions including the Department of Motor Traffic, Land Registry Office with the Department of Inland Revenue for the tax collection process, was also pointed out. The Inland Revenue Department stated that 29 such institutions have been identified thus far and the COPA Chairman Prof. Tissa Vitarana said that the Inland Revenue Department and other agencies will be re-convened to discuss the matter.  
State Minister Lasantha Alagiyawanna, MPs Tissa Attanayake, Niroshan Perera, Mohamed Muzammil, S. Sridharan, Dr. Upul Galappaththi, B.Y.G. Ratnasekera, Weerasumana Weerasinghe along with a group of government officials, were present at the meeting.