Sri Lanka’s revenue collection slows down impacting 100- day programme
View(s):The Inland Revenue Department (IRD)’s continuing failure to collect taxes due to the lethargic attitude of officials and poor administration at the helm could hinder the 100 day relief programme of the new government and hurt economic growth, Treasury officials warned.
According to the IRD’s monthly revenue performance report up to February 10, revenue collection was Rs.2, 928 million, falling short of the Rs. 5 billion target by Rs. 2, 803 million.
The Department should double the revenue collection efforts to meet the target and the present Director General should implement pragmatic programme towards this end, they said.
But the department officials are fighting for promotions after the change of the government and some of them have staged a protest demonstration recently against the top administration.
This situation is aggravating day by day and this was brought to the attention of the new Finance Minister Ravi Karunanayake as well, they disclosed.
The government will have to find an additional sum of Rs. 17 billion to meet the salary hike of public sector employees and pensioners, they said, adding that the reduction of tariffs on essential items would compel the Government to further cut down state expenditure.
This combination of reduced revenue and increased expenditure will inevitably result in an increase in the budget deficit and additional borrowing, they pointed out.
A senior Treasury official said the failure to increase tax revenue will cause pressure to cut capital spending “with a possible adverse impact on growth”.