Inland Revenue sets up High Wealth Individuals Unit to ensure their tax compliance

Friday, 8 March 2024 00:30 - - {{hitsCtrl.values.hits}}

The Inland Revenue Department (IRD) yesterday said it is paying close attention to High Wealth Individuals in a bid to increase taxes due.

IRD said the move is to ensure tax compliance of highly wealthy individuals in the country as part of efforts to restore fairness and confidence in Sri Lanka’s tax administration.

For this purpose, a High Wealth Individuals Unit (HWIU) has been established at the IRD, which is located in the Large Taxpayer Office.

The HWIU has received additional resources to focus on high-income and high-wealth individuals.

As a first measure, the HWIU will be contacting a select number of wealthy individuals and will work with them and their advisors to ensure that they are up to date with their filings of Tax Returns. IRD will also help them identify and avoid mistakes or omissions early in the filing process. The HWIU will be conducting additional risk assessments and profiling of wealthy taxpayers to conduct audits on cases that have the highest risks.

At the same time, the IRD is enhancing its collaboration with both domestic and international organisations to access information that will help the HWIU to identify potential tax non-compliance.

The IRD will also be working closely with Banks, the Financial Intelligence Unit (FIU) and other tax administrations through its extensive Treaty Network with 45 countries. This collaboration will help the HWIU to identify banking records and assets of wealthy individuals that may not have been disclosed.

The IRD said it is committed to monitoring the tax compliance of wealthy individuals and their related groups. By enhancing the focus and engaging with them, the IRD can be confident that wealthy individuals are duly paying their right amount of taxes.

“Through this engagement approach, we hope to enhance their willingness to participate and contribute to the government’s revenue collection efforts to overcome the critical socio-economic issues confronted by the country,” IRD added.