- Govt. opt system based on NIC number
The decision by Ministry of Finance of Sri Lanka to fine Rs. 50, 000 on individuals above 18 years of age (by 31 December 2023), for not obtaining a Tax Identification Number (TIN) by 1 February, was halted since it has been decided to use the National Identification Card (NIC) number instead of the initial registration process, The Daily Morning Business learnt.
Speaking to The Daily Morning Business, Media Secretary to the State Minister Ranjith Siyambalapitiya, Pathum Pasquel said: “The Committee appointed in this regard has decided to convert TIN through NIC number from the databases of the Department of Registration of Persons (ID Office) and the Department of Motor Traffic.”
Accordingly, people will not be subjected to fines or any punitive measure till 90% of this system is in place.
“A Committee has been appointed in which the Presidential Secretariat and State Minister Siyambalapitiya to introduce this new methodology for this (TIN),” Pasquel noted.
When The Daily Morning inquired how long it would take to establish this NIC-based TIN, he responded saying “very soon” explaining that once the databases of the aforesaid departments transferred to the Revenue Administration Management Information System (RAMIS) of the Inland Revenue Department (IRD), this would be in place.
TIN, however, does not imply any liability for tax payment; instead, it provides individuals with convenient access to numerous services offered by various state institutions without any complications and the taxpayer concessions will be provided when required. This methodology also would reduce tax evasion effectively, said the Ministry of Finance.
At the same time, the government revenue is to improve through direct taxes instead of indirect taxes improving the living condition for the poor and vulnerable.
“Personal Income Taxes (PIT) play a vital role in revenue generation and addressing inequality through effective redistribution. In Sri Lanka, PIT revenue has experienced a steady decline, dropping from 0.9% of GDP in 2000 to 0.2% in 2022—lower than similar low-income economies," The Chamber Of Young Lankan Entrepreneurs (COYLE) said in a recent statement issued.