Rs. 1,066 Billion in Defaulted Taxes for 2023

COLOMBO (News 1st); The Inland Revenue Department (IRD) has released a detailed report on the outstanding tax amounts as of December 31, 2023, providing clarity on the current tax arrears situation.

As of December 31, 2023, the IRD reported a total of 1,066 billion rupees in defaulted taxes. 

However, due to pending tax appeals, 878 billion rupees of this amount is currently held over. 

Therefore, the department could reasonably expect to collect 188 billion rupees.

From January 1 to June 30, 2024, the IRD collected 47 billion rupees in tax arrears through various methods, including seizing bank accounts of 900 taxpayers, offering installment payment plans, and other legal actions. 

Additionally, 57 billion rupees were recovered or reduced due to settled refunds and objections, resulting in a total reduction of 104 billion rupees in tax arrears for the year 2024.

As of December 31, 2023, out of the 188 billion rupees, 84 billion rupees remain to be collected.

Under the IRD's self-assessment system, taxpayers are required to submit their Tax Returns and pay the corresponding taxes. Failure to pay the indicated tax amount results in tax arrears. 

The department may issue additional or estimated assessments if the submitted reports are not accepted or if the taxpayer neglects to file a Return. Taxpayers have the right to appeal against these assessments within one month. If unresolved internally, the appeal can be taken to the Tax Appeals Commission, and further to the Court of Appeal and the Supreme Court if necessary. During this appeal process, the IRD cannot take collection action until a final decision is rendered.

The IRD emphasized that completely eliminating tax arrears is practically impossible due to the ongoing issuance of new assessments. The department's primary role is to maintain efficient tax arrears collection processes within the existing legal framework, as demonstrated by their efforts to reduce tax arrears by 104 billion rupees in 2024.