By:Staff WriterColombo (LNW):Sri Lanka’s two main revenue collection authorities, the Department of Customs and the Inland Revenue Department, are now firing all cylinders to reach revenue targets this year to overcome the country’s cash crunch, finance ministry officials said.
Sri Lanka Customs is looking for more informants who could provide information on undervaluations and other measures that people use to pay less customs duty in trade in a move to boost the crisis-hit nation’s revenue, as the island nation is in an attempt to reach the revenue target set by the International Monetary Fund in return to a US$3 billion loan.
Sri Lanka’s government revenue was just above 8 percent of the gross domestic product (GDP) last year, one of the lowest in the world after the state income plummeted following a politically-motivated tax reduction by former president Gotabaya Rajapaksa in December 2019.
Sri Lanka has agreed to raise the revenue and grant target to 11 percent of the GDP in 2023.P.B.S.C. Nonis, the director general of Sri Lanka Customs said the authority is now looking for more ways to boost the revenue to raise the government income.
He said that they have a 24-hour hotline and dedicated lines to handle this information. The informer’s confidentiality will be protected.”
Undervaluation and other deceptive measures to pay less customs duty are not unusual in Sri Lanka. Sri Lanka Customs has been rewarding informants according to the accuracy of information they provide, Customs officials say.
The reward amount is based on the total value of confiscated goods and the penalty imposed for the offence. Out of the total value, 50 percent goes to the Treasury’s consolidated account, while 5% percent goes to the disaster management unit at the Customs.
Out of the remaining 45 percent, depending on the accuracy of the information, informants are likely to get 60 percent, an official at the Customs said.
The total tax revenue collected by the Inland Revenue Department (IRD) for the first half of 2023 was 696,946 million rupees (2,233 million U.S. dollars), the IRD said in a press release on Wednesday night.
The corresponding revenue in the first six months of 2022 was 361, 832 million rupees (1,159 million U.S. dollars), the IRD said.It represents a 93 percent increase in tax revenue this year, the IRD said.
The reasons for this increase are decisive changes in the tax policy, the gradual recovery of the economic situation of the country and the efficiency of the efforts of the IRD, Commissioner General Inland Revenue D.R.S. Hapuarachchi said.
Meanwhile, an IMF spokesman has told the media that revenue mobilization is a key pillar of the IMF program with Sri Lanka.