IRD gets new chief; tax collection back on track

Tax collections due from more than 40,000 companies -- held back due to legal impediments for more than seven months -- are to be revived after this week’s appointment of a Permanent Commissioner General of the Inland Revenue Department.

The companies had challenged the directives given by the Acting Commissioner General, thereby preventing the Department from moving to collect an arrears amounting to more than Rs 50 billion during the past seven months.

An IRD senior official said that of the 40,000 companies, 25,000 companies had cases where they had defaulted the payment of taxes. Bu they had made use of the loophole and refrained from paying the taxes.

He said there were some 125,000 files relating to the default in payments of Value Added Tax ( VAT), Nation Building Tax ( NBT), Income Tax, Withholding Tax, Capital Gains tax, Economic Service Charge and stamp duty. Acting Commissioner General Nadun Guruge whose appointment as the Commissioner General of Inland Revenue was approved by the Cabinet this week has directed the staff to work over the weekend to clear the backlog as there is a time frame for the dues to be collected.

The official said the appointment of the Commissioner General would empower him to revive the court cases, issue orders, freeze bank accounts, inspect business premises and seize properties in keeping with the Inland Revenue Act. An Acting Commissioner General is not empowered to issue orders for such duties to be carried out.

On March 31, the Sunday Times exclusively reported that the failure to appoint a permanent Commissioner General was holding back the collection of taxes and would result in failing to meet the revenue targets.

Earlier controversy reigned over a decision to appoint a former Central Bank Deputy Governor to the position. However, he was not able to carry out duties in view of protests by union and employees.

Thereafter, Senior Deputy Commissioner Mr Guruge was appointed as the Acting Commissioner General until his appointment was confirmed last Tuesday.

The IRD has been set a collection target of Rs 850 billion this year.