Uncollected Taxes Cast Shadow on Sri Lanka's Finances

COLOMBO (News 1st); Alarming discrepancies in tax collection emerged at a special Parliamentary discussion, casting a shadow over Sri Lanka's fiscal health. 

The session, chaired by Justice Minister Dr. Wijeyadasa Rajapakshe delved into the first half of 2023's tax performance, unveiling a staggering shortfall that sparked calls for systemic reforms.

The startling statistics revealed that only 18% of the expected 943 billion rupees in tax revenue was actually collected during the first six months of last year. This translates to a staggering 767 billion rupees in uncollected taxes, attributed to various unspecified reasons by the department officials.

The recoverable tax income, as identified by officials, stands at a mere 175 billion rupees, with an additional 37 billion rupees collected through tax arrears this year. 

Adding to the concerns, Mahindananda Aluthgamage, Chairman of the National Economic and Physical Plans Sectoral Oversight Committee, revealed that individuals could legally avoid paying taxes for up to 15 years, further hampering revenue collection.

Aluthgamage, echoing the committee's repeated criticisms of the Inland Revenue Department, stressed the need for a comprehensive overhaul to address operational inefficiencies and eliminate such loopholes.