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Tax arrears top Rs 940 billion and much of it ‘unrecoverable’

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The members of the committee

Inland Revenue Department (IRD) officials recently told the Sectoral Oversight Committee on National Economic and Physical Plans that tax arrears amounted to Rs. 943 billion as at 30 June 2023.

However, Rs. 767 billion could not be recovered due to various reasons, they said. The Department had recovered Rs. 37 billion rupees from tax arrears, they said.

The IRD received tax reports before 30 November every year, the officials said. After receiving the tax report, a relevant officer would enter the information into the RAMIS system and identify problems.

Then an audit would be conducted, they said. In some cases, further information was sought as clarifications. The officials pointed out that when such information was requested, often the tax defaulters deliberately delayed the provision thereof.

The officials said that under the existing laws, officials had 30 months to audit a tax report. Another 24 months could be taken after taxpayers make appeals to the Commissioner General, they said.

The Committee was of the view that the appeal period was too long, and it should be reduced to six months. However, the 30-month period for audits should remain as it was, the committee decided after deliberation. However, the MPs decided that the Minister of Finance must have the authority to change the period through a Gazette if necessary

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