Customs, IRD, MTD: Revenue loss of Rs.240 Bn.

In a startling revelation, the parliamentary Committee on Public Accounts (COPA) said it had found that the country’s three main revenue-collecting departments had failed to collect past dues running into billions of rupees accumulated over a period of time.

It has directed the Inland Revenue Department (IRD) to appoint a Committee to recover unpaid taxes amounting to Rs.210 billion, waive them or take legal action to recover the outstanding amounts.

COPA has revealed that the loss of revenue reported by the Government’s three main revenue-earners -- the Motor Traffic Department (MTD), the Sri Lanka Customs and the Inland Revenue Department amounts to more more than Rs.240 billion.

For instance, the Customs Department has failed to recover a tax income of Rs.18,865,901,197 from state institutions as at July 30, 2015. The department’s CAO had however told COPA that measures were in place to recover these dues and such issues would not arise in the future. The Customs Department has granted tax concessions of Rs.4,362,899 to a vehicle assembling company for the period 2003 to 2006 but only Rs.2,181,449 had been received by January 2016.

The Committee directed the AO to submit a detailed report on the recoveries to the Committee if the defaulted tax payments had been paid.

In another instance, a tax of Rs.9.02 million due from a company that had imported 269 vehicle chassis on a bank guarantee had been defaulted.

The AO had informed COPA that arrangements had been made for the relevant tax amount to be remitted to the Customs Department at the time the vehicles were sold and that a case was pending in the Supreme Court on the registration of those vehicles.

COPA had found that 597 vehicle-files had gone missing at the Department of Motor Traffic (DMT) and directed the AO to conduct a ministerial level inquiry against the officials responsible and submit a report to the Auditor General. Meanwhile, a staggering Rs.740 million allocated for the E-motoring Project had been utilized for other purposes and as a result the E-mortoring Project had been delayed.

COPA had also come across cases of corruption, fraud and malpractices in the registration of 5,494 vehicles and recommended measures to be taken against the officers responsible. A complaint has been lodges with the CID to inquire into 5 Prado vehicles that had been registered by paying less duty and registration of those vehicles have been ordered to be suspended.

The Committee observed that the activities of the Department were at an unsatisfactory level owing to the negligence and inefficiency of the responsible officers. The Committee emphasized that more attention should be paid to the lack of use of state of the art technology, lack of human resources and inefficiency. It was also revealed that the IRD had failed to recover Value Added Tax (VAT) amounting to Rs.741,604,539 from 2009 to 2015 but a refund of Rs.125,449,380 had been made in 2014/2015.