Mr. Ranjith Hapuarachchi, former Income Tax Commissioner, said that it is wrong to indicate the income tax evasion in Sri Lanka as Rs. 900 brillions in the reports, it is only used for political gains, and the actual amount of income tax evasion is less than that.
He made these comments in a conversation organized by Advocata under the theme of building the country.
He further said that one of the biggest problems facing the Income Tax Department is the lack of information about personal income.Due to this reason, there are issues of accuracy in the assessments conducted by the department. In many cases, the tax payment is assessed as more than the amount of tax payable.
Then the relevant tax payer protests that he is unable to pay the amount. Then the Income Tax Department takes legal action. There are several problems that arise when going to legal proceedings. One is that it takes at least 7 to 8 years to finish a tax case like this.The other is that due to the lack of information available to the department, it is difficult to prove that the assessment prepared by them is the most accurate one. In some cases, if the amount estimated to be paid by the concerned person is correct, the court orders it to be paid. But if the assessed amount is proved to be unreasonable, the court will cancel the payment.
But in the statistics of the Income Tax Department, those incorrect assessments are also shown as tax evasion. On the other hand, it takes a lot of time to prove them wrong and correct the data. Therefore, stating the amount of tax evasion as Rs.900 billion is not accurate and the actual amount is less than that, he said, which is just an idea that is popularized for political gains.
Apart from that, Mr. Heshan Kuruppu, the Chairman of the Chartered Accountancy Institute, stated that the list of tax defaulters also includes the names of people who are currently paying taxes correctly. Therefore, the Income Tax Department should present accurate data on the amount of complete tax evasion, and the amount of tax evasions that are being sued in court due to higher assessments, he said.
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