Tax profiles on all above the age of 18

Comprehensive plan to double tax targets; bank transactions, purchases and utility bill payments to be monitored Tuition class owners and teachers summoned for meeting on Oct. 24; of 39,000 registered doctors, only 6,000 have tax files

All citizens above the age of 18 will be placed under scrutiny for tax liability from next year under a new plan to double the collection within the next two years, the Inland Revenue Department (IRD) said.

The IRD's Deputy Commissioner General Nadun Guruge said the department would maintain a profile of all citizens above the age of 18 and monitor their bank transactions, purchases and payment of utility bills to determine whether they should be made liable for tax payments.

He said that for this purpose, the IRD had linked up with about 35 state institutions, including the Motor Traffic Department, banks, the Department for the Registrar of Persons, the Credit Information Bureau and the Board of Investment.

The National Identity Card number, the name and the address would be the key information used for the monitoring process.

"The monitoring process will continue and the persons will be informed about the tax liability depending on the transactions, if the taxes are not paid on a voluntary basis," he said. He said the main objective was to raise the tax revenue as part of the Government's plans to reduce indirect taxes and increase direct taxes. At present, 80 percent of the revenue comes indirect taxes and the Government has said it hoped to reduce this to 60 percent and increase direct taxes from 20 to 40 percent by 2020.

The Department’s current annual tax target of Rs 625 billion is expected to be raised to Rs 1,200 billion by 2020.

Mr. Guruge said that to raise the reve- nue from direct taxes, the IRD needed to have more individuals paying taxes.

The official, who is also in charge of Tax Compliance and Enforcement, said that as part of the plans to implement next year’s plan, the IRD would summon some of Sri Lanka’s biggest tuition class owners and teachers for a meeting on October 24 to encourage them to register to pay taxes voluntarily. If not, their earnings would be monitored and they would be forced to pay taxes.

He said similar meetings would be held with other professionals, businessmen, importers, manufacturers and those involved in the buy-and- sell trade.

Mr. Guruge revealed that of some 39,000 doctors registered in the country, only about 6,000 had tax files.Similarly, there were other other high-earning profes- sionals who were underpaying taxes. But this would be corrected under the new scheme.

Mr. Guruge said the IRD hoped it could increase the number of tax files to 2.2 million within two years. Meanwhile, of this year’s target of Rs 625 billion, Rs 451 billion has been collected so far, as against Rs 348 billion collected in the corresponding period last year. The department had received Rs 108 billion from corporate and non-corporate taxes while the target was Rs 190 billion for this year. For VAT payments Rs 203 billion had been received while the target was Rs 232 billion. PAYE tax payments collected so far was Rs 25 billion while the target was Rs 42 billion. Of a target of Rs 42 billion from Nation Building Tax (NBT), Rs 35 billion has been received so far.