Inland Revenue exceeds target by Rs. 600 m

Manjula Fernando, Uditha Kumarasinghe and Irangika Range

KOTTE: The Department of Inland Revenue has exceeded its income target for the first two months of this year by Rs. 600 million, Deputy Finance Minister Ranjith Siyambalapitiya announced in Parliament yesterday.

He said they were optimistic the Department would make a huge contribution towards the National Income exceeding the expected annual target this year as well.

When the House took up the debate on the Inland Revenue (Amendment) and the Economic Service Charge (Amendment) Bill yesterday, the Deputy Minister said: “The Inland Revenue Department projected an income of Rs. 248 billion for the year 2006. At the end of the year the Department earned Rs. 253 billion.

The targeted revenue for the year 2007 is Rs. 315 billion. The Government expects to generate and additional Rs. 15 billion this year to fund the Moragahakanda Hydro Power Project, which is expected to be completed with indigenous resources.

In 2005, the income by way of taxes amounted to 14.3 per cent of GDP. This rose to 15.6 per cent in 2006 and our objective is to further increase this upto 16.7 per cent this year.

I would like to describe the two Bills presented here today as proposals for taxation to protect the local industry and encourage the development of the export sector.

The Inland Revenue Department has opened 37,000 new income tax files in 2006. “We expect to increase the existing 420,000 tax files by another 100,000 this year.”

Deputy Minister Siyambalapitiya said that compared to other countries with similar population levels Sri Lanka has a lower number of tax payers. For instance in Malaysia about three million people are paying taxes to the Government.

He said the Department will look into ways to generate more income by way of direct taxes as a solution to eradicate the social income disparity.