Taxpayers frustrated by IRD's RAMIS system

A 72 year-old taxpaying pensioner with additional income from his consultancy services for a private firm faced an unexpected shock of his life when he browsed online to determine the tax returns to be paid.

His tax bill including arrears had gone up to Rs.125,000 depite him making payments quarterly on time, and it was discovered that this was because of blunders made by heads of the IT division, computer operators and system errors at the Inland Revenue Department (IRD).

Another tax payer noticed that his penalty for not paying taxes on time was Rs.171,000 although his dues were less than one cent.

Every day of the week, dozens of people visit the IRD head office in Colombo seeking clarification over surprise bills arising from data entry errors that were out of their control.

Normally, a mistake on their tax code meant an under or over payment may have been passed even under the watchful eyes of tax officers at the IRD making the life of a tax payer worried and miserable.

Errors can crawl into the codes, which apply to the Pay As You Earn ( PAYE) system of automatic taxation, when someone has multiple sources of income, or because of a change in employment, informed sources said.

This was the present output of the Rs. 9 billion-worth automated tax collection system introduced two years ago by the IRD which is now incapable of administering and operating the automated system giving trouble to tax payers and headaches for tax officers.

Updating the automated tax collection system, with the introduction of the new Inland Revenue Act is yet to be completed compelling officials to revert to the manual system, a senior IRD commissioner said.

The IRD introduced the automated system called Revenue Administration and Management Information System (RAMIS) two years ago.

A Singaporean firm was given the task of implementing the project aimed at creating a more efficient tax and revenue collection system.

These Singaporean experts continued to manage and operate the system while necessary data entry operations were carried out by a team of new recruits with IT qualifications, he divulged.

He noted that decision-making and handling the complicated automated system was vested with a handful of officers who are not computer savvy and deemed incompetent, after the Singapore experts limited their involvement.

The local involvement in the management of the system without the consent or the support of the Singapore firm has led to an ‘ always breakdown’ in the RAMIS operation interfaced with 23 state agencies such as the Motor Traffic Department, the Customs, the Board of Investment and state banks.

IRD functions of monitoring transactions online, auditing tax files of those liable to pay taxes, accepting tax returns, issuing receipts and other related activities as well as e-registration and e-filling are not working well at present, at least three leaders of IRD unions told the Business Times.

IRD unions have written to Finance Minister Mangala Samaraweera alleging that the RAMIS introduced two years ago to streamline tax collection is causing a loss of tax revenue running into billions of rupees.

But all their complaints went unheeded, they said adding that as responsible officers entrusted with the task of collecting revenue for the Treasury they have brought these issues to the notice of the authorities but to no avail.

The Singapore e Governement Leadership Centre ( eGL) was engaged in January 2013 to impart the transformation training to 180 senior officers from the IRD and the Ministry of Finance, over a period of 10 months.

Ms. H.M.N.S. Gunawardana, the then Director General of the Department of Legal Affairs at the Ministry spearheaded the training programme and transformation from manual operations to RAMIS under the directions of former Treasury Secretary Dr. P.B. Jayasundera.

However this project has now become a white elephant, a trade union leader alleged.