Jun 26, 2022

Delay in appointing new tax chief: Billions may be lost

The Inland Revenue Department (IRD) is in danger of losing billions of rupees in uncollected taxes due to the delay in appointing a new Commissioner General (CG).

The former CG retired three months ago and the position has since been overseen by an Acting CG. Under the Inland Revenue Act, however, the Acting CG has no mandate beyond routine administrative work. He does not have powers over tax collection, appeals assessment or implementation of the newly introduced taxes unless they had already been approved by the previous appointee.

The IRD was been set a revenue target of Rs. 871billion this year. But meeting that is proving difficult owing to the delay in appointing a permanent CG, the IRD Staff Officers’ Association Secretary T.J. Chandana said.

“However, whether we collect anything like that is a problem due to this delay,” he said.

“The main issue is that companies file tax appeals each month, seeking to pay less than they owe. Whether or not these appeals are granted is up to the CG. An Acting CG has no powers to assess them. A tax file also has an expiry date and once it expires, an Acting CG has no powers to collect it,” he said

Mr Chandana said an Acting CG also could not delegate powers to other officers and this would directly affect the country’s entire tax revenue.

He urged the Government to appoint a permanent CG to ensure the losses were minimised. “We don’t even know how much tax revenue we have lost so far due to this delay since that too has to be assessed by a permanent CG. This has to be rectified immediately,” he insisted.