Why make it easier to pay the government?

• One of the first services being offered under the current digitalisation initiative is GovPay, a convenient way of making payments to various state entities, including the Inland Revenue Department (IRD)
• GovPay is rapidly adding government agencies. The government gets the money quickly and payers are saved the hassle of having to prove that payments have been made. A win-win solution

More than two decades ago, we were kicking around ideas on what would be the most attractive e-government (e-gov) services we could introduce through the new World Bank funded e-Sri Lanka Programme. Someone suggested paying taxes electronically, but it did not tick the box of generating support for more e-gov services. Who likes paying taxes? And it was hard to do in those pre-smartphone days. 

One of the first services being offered under the current digitalisation initiative is GovPay, a convenient way of making payments to various state entities, including the Inland Revenue Department (IRD). As the ICTA Board Member leading the effort, Harsha Purasinghe, announced in December 2024: “Launching by the end of January with 16 institutions, and with 30 more joining in two phases before end of April 2025, GovPay promises a seamless and convenient experience. Imagine paying for any government service quickly and easily through your favourite Fintech App or online banking service.”

Why GovPay is good for us

Recently, I spent a lot of time trying to unravel a problem that was not entirely caused by me. Amidst the COVID lockdowns, I was informed by the IRD that I had not made a number of tax instalment payments in past years. The problem could not be fully resolved until the bank branch at which I had deposited the disputed cheques found that numbers had been transposed while recording the payments in the system. So, the money had been debited from my account but not recorded correctly in the IRD records. My bad handwriting may have contributed, but the blame lay more with a tired bank employee typing in numbers.

Now that IRD has made payments directly from the taxpayer’s account mandatory, the problematic steps have been eliminated. The taxpayer is no longer permitted to write numbers by hand and a bank employee has been relieved of the task of inputting the numbers. I make payments directly to the IRD and receive two confirmations, one from my bank and the other from IRD. 

Unlike in 2003, many banks and Fintechs have apps that allow direct payments to entities like the IRD and Customs equipped with digital back-ends. The glitches have been worked out. GovPay is rapidly adding government agencies. The government gets the money quickly and payers are saved the hassle of having to prove that payments have been made. A win-win solution.

No one really likes paying taxes, so this is not truly an ecstasy-inducing solution. In any case, it’s only a few who pay taxes (and even fewer who have to make quarterly payments)

What could make more people happy?

Traffic fines payable from smartphones. 

Again, like we thought back in 2003, helping people to pay taxes and fines is not the way to win a popularity contest. But it will sure make a lot of people less unhappy (which is kind of like making them happy). And this solution will hugely contribute to the President’s Clean Sri Lanka campaign.

In addition to having bad handwriting, I do exceed the speed limit and cut the line on occasion. These infractions tend to be observed by the police when I am far away from Colombo. The punishment is not the money. It’s the hassle of paying the fine at a post office and then retrieving the confiscated driver’s license in some faraway police station – and not being able to do whatever one came to do as a result of this back and forth.

The procedure has transaction costs so high that some far-from-home motorists on weekends may be tempted by the obvious workaround. This is why making traffic fines directly payable from one’s mobile will do more for Clean Sri Lanka than a hundred beach clean-ups. 

This is no easy task (the answer to the obvious question as to why it has not been done so far). The procedures for recording traffic violations will have to be amended. All police officers had official mobile phones back in 2019; they may have been given smartphones by now (or this may provide the rationale). The official on the roadside must receive a credible notification that the fine has been paid so he can release the license. The motorist must have a payment app on her phone and know how to use it. 

A critic may say that the transaction cost was a feature not a bug. I can testify that the pain of the process has made me more cautious in faraway places. But traffic fines have been increased. Penalty points on one’s license for traffic violations are being introduced. Once those points start affecting insurance premia real behavioural changes will be seen. 

Why pile it on?