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Amended e-filing system at IRD by April 

28 Mar 2021

By Alma Rizvi and Yakuta Dawood    Corporate tax payers are mandatorily required to submit their tax payment through the e-filing system, the Inland Revenue Department (IRD) is set to introduce from 1 April 2021 onwards.  IRD Commissioner General H. M. W. C. Bandara said that IRD has enabled the facility for online payments through four banks; National Savings Bank (NSB), Commercial Bank, Sampath Bank and Nations Trust Bank (NTB) are facilitated to pay through e-filing.  Under the Budget 2021, Premier and Minister of Finance, Mahinda Rajapaksa stated that “the tax law should be amended and will be mandatory for all Companies to file their taxes only on an ‘E-Filing’ system with effect from 1 April 2021”.  Additionally, IRD has transitioned towards the full automation of its core activities in a bid to improve efficiency, transparency and financial flexibility in a government burdened by decreasing revenue.  The revenue authority has sought various measures to increase the taxpayer base, ease revenue collection and to make the system both efficient and taxpayer-friendly and the E-Filing Platforms Market is expected be convenient. In addition, the automated system will enable taxpayers to make their payments online from the convenience of their offices or homes.  Bandara further pointed out that previously there was no system for corporate payers and VAT taxpayers can be used for the service and to ensure better and transparent management with regard to the provisions for anticipated eight losses of loans and doubtful loans in calculating taxes of banks and financial institutions.  “If the manual copy is submitted it will be subjected to data entry which can result in delays in case there are errors, hence, E-filing is easy for both parties,” he added.  In 2020, the Inland Revenue Department implemented the E-Services for the obtaining of a Tax Identification Number. The Advanced Personal Income Tax system was also outlined which allows employees to give or withdraw consent for the payment of their income taxes through their employer.  Meanwhile E-filing will also be subjected to the benefits laid out for E-services last year, such as registering, filing returns, checking your tax balance and transaction history, paying taxes, requesting a refund, lodging an appeal or an objection, or requesting for a clearance certificate.  Additionally, an alternative tax payment system was implemented last year with the participation of major banks. Taxpayers are now able to remit taxes owed to the Inland Revenue through the system.  Incomes from other regular sources like interest and dividends are no longer subject to withholding tax. Withholding Tax was considered a final tax. Recipients will now have to pay advance income tax under the tax slabs applicable and file a return.


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