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Sri Lanka’s IRD gets less govt assistance than NBRO: official

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ECONOMYNEXT – Sri Lanka’s government could do more to facilitate the Inland Revenue Department (IRD) in carrying out its mandate and prevent more salaried employees and business owners becoming tax evaders in light of a recent tax hike, an official said.

IRD Deputy Commissioner General J T Chandana told reporters on Tuesday January 10 that the department is not even provided the fuel its officials need to go to the field for audits and inquiries.

“Even the National Building Research Organisation (NBRO)”, which he said does not contribute significantly to the economy, gets more from the government than the IRD gets at present, the senior official complained.

Under President Ranil Wickremesinghe, the cash-strapped government is attempting to boost revenue through increased personal income tax and cost-reflective utility tariffs, among other measures, which has been met with both harsh criticism and cautious praise.

While some experts see the sharp rise in taxes as an added burden on the crisis-hit country’s increasingly frustrated middle class, a hindrance to growth and a disincentive to business, others say it is necessary in order to avoid more money printing, which led to the crisis in the first place.


Sri Lanka gambles on tax hikes; downside risks seen

IRD Deputy Commissioner Chanada said the steep income tax hike could lead to more taxpayers leaving the tax net.

“As taxes are increased, money left for consumption is reduced for employed people and business owners. Savings drop, too.  This can have an impact on the economy in some way,” said Chandana.

“Rather than increase taxes and add to the pressures faced by the people, we ask that the government provide the facilities IRD needs to carry out its mandate. That way, we can increase revenue,” he said.

“We may see a trend of people leaving the tax net the heavier their tax burden becomes. To prevent that, IRD officials must go out to the field and carry out their audits and inquiries as necessary,” he added. (Colombo/Jan10/2023)

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