Inland Revenue Department (IRD) employees, angered by the brutal attack on a colleague at the Matara office on Wednesday night, will decide tomorrow on the course of trade union action to back demands for the government to arrest the suspects.
The crisis comes as tax collectors are under heavy pressure to keep to revenue targets in addition to collecting a huge shortfall from 2009 collection estimates. Officials are saying the current economic crisis, affecting the cost of living and livelihoods of people, is one reason for large-scale tax evasion and officers coming under physical attack.
Trade union officials, expressing concern over delays in the arrests, said that at tomorrow’s meeting, they would decide whether they should work-to-rule or strike if the police display the usual apathy towards similar attacks in the past where political backing had been involved.
“We know how these investigations go and the usual assurances are just futile,” one official said.
Almost the entire staff of around 1,500 staged a massive protest opposite the IRD head office in Colombo demanding that government authorities arrest and punish those who were responsible for the attack on M.H. Denzil, Deputy Tax Commissioner of the Matara branch of the Tax Department.
He was severely beaten by unidentified persons using knuckle-dusters when he was travelling in a bus after work late on Wednesday.
Though the last budget indicated that Rs.150.22 billion had been collected as tax in 2009, only Rs.141.52 billion was collected leading to the Rs 9.4 billion shortfall. Short of cash, the government is pushing the Tax Department to do whatever to collect tax revenue with officers resorting to door-to-door visits to check on companies.
Additionally taxes to the value of Rs.115.68 billion in 2008 and Rs.6.15 billion in 2007 were yet to be collected, the sources said.
Inland Revenue Deputy Commissioner Sarath Costa said tax officers were carrying out their duty under extremely difficult conditions as they had been pressurized by the Finance Ministry to meet the revenue targets. Thus collection had become extremely difficult because of the present economic situation of the people.
He said that tax officers should be allowed to carry out their duties without intimidation. “So far, they fulfilled their duties without fear or favour but now the officers have to seek police protection or other security measures as they are vulnerable to threats and attacks by unruly persons who are following the law of the jungle after former Deputy Minister Mervyn Silva’s street drama of tying up a Samurdhi officer (a public officer) to a tree for his failure to attend an anti dengue meeting. The incident gave a bad precedent and it is a grave situation if the law of the jungle prevails over the law and the judiciary,” he said.
Tax Chief K.M.S. Kandegedera said the department had intensified the revenue collection process on a directive issued by the Finance Ministry.
It has introduced a three-pronged strategy to increase tax compliance to between 70% and 80% from a current 40% in the next six months with the intention of reaching targeted revenue of Rs.124 billion.
He said that officials would visit companies which had failed to submit returns and defaulted taxes or with huge arrears running up to millions of rupees. Legal action would be taken against tax defaulters as a final resort, he said.
Around 50% of local companies of certain categories have failed to furnish tax returns and this is a serious matter, he said adding, however, that all the big companies were in full tax compliance. The IRD is maintaining 24,278 tax files of resident and non-resident companies at present and plans to widen the tax net to increase this number as there is a boom in the tourism, construction, transport, media, and advertising and telecommunication sectors. There are a total number of 825,045 taxpayers in the island. |
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