The Inland Revenue Department (IRD) yesterday expressed confidence that it would achieve the given target of Rs. 600 billion by the end of the year, insisting that it has already collected Rs. 560.6 billion.
“The Government has given the department a target of Rs. 600 billion for this year and as of 12 December we have collected total revenue of Rs. 560.6 billion. We are confident that we will be able to meet the target within the next two weeks,” IRD Commissioner General Ivan Dissanayake told Daily FT.
According to him, it is an increase of 130% compared to same period last year, which collected Rs. 431 billion.
However, it was pointed out that the majority of this revenue was generated through indirect taxes. “Around Rs. 250 billion of the total revenue collected was from indirect taxes, an increase of 67% largely generated from Value Added Taxes (VAT).”
He said the computerised systems and Government’s fiscal policies as well as the efficiency of the staff were key factors for the improved tax collection this year.
“The Revenue Administration Management Information System (RAMIS) has gone live connecting the department with another 23 Government agencies. This helps to equip IRD with the necessary information to be more effective in tax administration and expand the tax base, which will thereby eliminate the distortions in the market and create a level playing field for all businesses,” he added.
Dissanayake emphasised that Government revenue was expected to increase at a higher rate going forward with the implementation of new Inland Revenue Act from 1 April as well as in continued expansion in domestic economic activities.
He said the main objective of the new Inland Revenue Act is to introduce a 60:40 direct to indirect tax ratio from the current direct to indirect tax ratio of 20:80 within the next three years with an across-the-board tax regime for taxable income.