Finance Ministry to present action plan to collect tax arrears

The Finance Ministry will present an action plan to collect tax arrears, as latest figures showed that government revenue was set to fall short by Rs 529 billion by the end of the year.

A senior Treasury official said that an action committee would expedite revenue collection, amidst the International Monetary Fund (IMF) concerns about the country's tax collection.

The official said that seizing property and bank accounts, and filing court action would be some of the tough action under the Inland Revenue Department (IRD) Act the committee would consider enforcing.

The move comes following a recommendation by a sectoral oversight committee on minimising the impact from the economic crisis. The committee has made its recommendations to the Finance Ministry Secretary, who is also the Treasury Secretary.

The committee meeting was attended by Treasury officials and trade union representatives from the IRD where it was revealed that there was a challenge of reaching the revenue target of Rs 1,667 billion for the year.

Secretary of the IRD Service Union H A L Udayasiri told the

Sunday Times they pointed out several shortcomings in revenue collection and said they had drawn attention to the revenue drop from March onwards, but no solutions were provided by the Finance Ministry.

They pointed out that supervision and auditing on some of the large scale tax files need to be enforced, and drastic action needs to be taken in order expedite revenue collection.

The oversight committee recommended to the Finance Ministry that trade union representatives be included in the proposed action committee to collect revenue.

Meanwhile, latest figures compiled by the government shows that the total tax in dispute as of September 2023 was Rs 83 billion. Of the total, Rs 52 billion was VAT cases, Rs 29 billion economic service charges and Rs 616 million withholding tax.

The total number of appeals at the beginning of this year stood at 825, with 171 new appeals this year.

Secretary of the IRD Service Union H A L Udayasiri told the Sunday Times they pointed out several shortcomings in revenue collection and said they had drawn attention to the revenue drop from March onwards, but no solutions were provided by the Finance Ministry.