The Inland Revenue Department is moving to adopt international good practices as a basis for improving tax compliance from some of the largest companies operating in Sri Lanka.
Internationally, many tax offices approach improving large taxpayer compliance by tailoring their dealings with taxpayers based on an understanding and assessment of risks posed by individual businesses.
“We have decided to pilot new approaches to tax compliance in Sri Lanka, similar to those used internationally,” said Deputy Commissioner-General Nadun Guruge. “Initially, over the next 4-6 months we will focus on large businesses in the construction sector. We will be applying a mix of service and enforcement approaches that have been shown to improve taxpayer VAT compliance in other countries’, he also said.
The pilot program is planned to commence from October 2017. After evaluating impact of the pilot towards the end of this year, the IRD will then determine the suitability of broadening the approach to other industry sectors and businesses.
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