While the government struggles to manage adequate revenue to meet its daily financial liabilities, the Inland Revenue Department (IRD) is found unable to recover accrued tax dues worth more than Rs 113.07 billion.
The annual report unveiled by the IRD shows that the government authority has failed to recover the aforementioned amount of tax dues as of the fiscal year 2022/23. The tax amount of 270,383 taxpayers has remained due on the headings such as late fee, interest and additional charges.
As per the IRD records, an additional amount of dues worth Rs 47.71 billion was generated during last fiscal year. As of FY 2021/22, the dues had remained Rs 65.35 billion.
The IRD fell short of its revenue collection target in the last fiscal year by Rs 147 billion. The department collected revenue worth Rs 479 billion against its target of Rs 626 billion during the period.
According to the IRD, it has failed to meet its revenue collection targets for six successive years since 2017/18. The low revenue collection amid soaring government expenditure has given rise to a huge budget deficit, leading to a surge in the public debt.
The low revenue collection is mainly due to the government being unable to enforce effective mechanisms in the tax system, according to experts. In the last fiscal year, only 2.768 million taxpayers filed VAT details, down from 2.886 million companies in the previous year.
“Decline in the domestic consumption, decrease in imports, banks failing to mobilize adequate credit, increase in unproductive expense of the government, lack of business-friendly environment and exorbitant revenue target set by the authority are among the reasons behind the shortfall in the revenue collection,” said an official of the IRD.
Meanwhile, a total of 5,443 taxpayers, unsatisfied with the tax issues, filed cases against the tax authorities by the last fiscal year end. Tax amount worth Rs 145.77 billion was appealed for administrative review by the taxpayers concerned.
