Sri Lanka plans to levy heavy penalties for tax defaulters in 2017

Oct 04, 2016 (Reuters) – The Sri Lankan government plans to impose heavy penalties for tax defaulters and expand tax offices across the country as it aims to increase the tax base by bringing to heel thousands of tax dodgers, Finance Minister Ravi Karunanayake said on Monday.

The moves are expected to boost the island nation’s tax revenue, in line with a government commitment to meet part of a condition set by the International Monetary Fund for a loan of $1.5 billion it approved in May.

“If somebody try to hoodwink and get caught, they can be subject to very heavy penalty,” Karunanayake told a Foreign Correspondents’ Association (FCA) forum late on Monday in Colombo.

He said the country has only around 650,000 tax files, where as the number should be around 2 million to achieve the revenue targets.

“One thing we don’t want to do is taxing the people who are already paying taxes. But we will be very strict with others.”