Mass registration of individuals for income tax: Misguided approach

THESE days, not only talk of the town but even talk of the remotest villages is about the paying-in slip recently posted by the Inland Revenue Department (IRD) to every Appuhamy, Kandasamy and Abusaaly.

- By N.M.M. Mifly

Instead of registering everyone at once, the IRD should adopt a phased or risk-based strategy

Six months ago, the IRD proudly announced that it had registered nearly 10 million individuals for Taxpayer Identification Numbers (TIN).

This so-called achievement was carried out under Extraordinary Gazette Notification No. 2334/21, dated 31.05.2023, issued by former President Ranil Wickremesinghe in his capacity as Minister of Finance. (https://www.dailymirror.lk/breaking-news/Ten-million-registered-for-TIN-7-million-still-unregistered-IRD/108-307174)

To anyone familiar with Wickremesinghe’s political style, this came as no surprise. Known for arbitrary and deeply unpopular decisions, he had issued the gazette requiring every individual over 18 years of age to register with the IRD and obtain a TIN effective from 1 January 2024—purely based on age, without any regard to income level or tax liability.

On 2 January 2024, the author of this article wrote in the national dailies including Daily FT under the headline “Requirement for individuals over 18 years to register with CGIR not valid,” (https://www.ft.lk/columns/Requirement-for-individuals-over-18-years-to-register-with-CGIR-not-valid/4-756910). He exposed the absurdity of this exercise and warning of its adverse implications for the IRD itself. As public outrage mounted and with two major elections looming later that year, the RW Government quietly backed down—burying the scheme without a word of explanation.