News
IRD officials claim Rs. 453 million as incentives, but Treasury to insist on targets first
View(s):By Damith Wickremasekara
The Treasury is set to maintain a strict policy of payment to Inland Revenue Department (IRD) officials, who have claimed up to Rs 453 million as incentive payments due to them for collecting taxes.
According to a senior Treasury official, at a meeting with IRD officials next week, the Treasury will insist that the incentive should be paid in accordance with reaching targets set by the government. The move came as the Treasury directed the IRD to open 30,000 new tax files next year with a revised income target of Rs 2,200 billion—an increase of Rs 550 billion compared to this year. The IRD was set a target of Rs 1,667 billion for this year.
The senior official said that among the 30,000 new taxpayers, the IRD has been directed to look for new taxable areas by issuing tax numbers at the point of opening a bank current account, obtaining approval for a building plan by the applicant, registering a motor vehicle or renewing the licence by the owner, or registering a land or title to a land by the buyer.
The IRD has also been advised to set up a special division to monitor large taxable incomes, as current records show that only 700 files were registered under the Large Tax Unit. The division is expected to keep scrutiny on large-scale businesses.
The department has also been told to carry out field investigations to determine persons evading tax payments and get them to register to pay taxes while closely monitoring small and medium-scale entrepreneurs who have already registered but may have expanded their businesses without paying taxes.
The officials said the new revenue targets had been in keeping with International Monetary Fund (IMF) requirements, and therefore it was compulsory to generate the income as taxes.
The move to find new ways of increasing tax payments comes in the wake of the failure of previous efforts.
President Ranil Wickremesinghe, presenting the 2024 budget this week, conceded that previous attempts had failed.
“We requested several times from the people who earn higher incomes to open a tax file. However, the majority of them did not do so. The main reason is that they believe that there will be unnecessary complexities in tax collection,” President Wickremesinghe noted.
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