Tax Collection System

In accordance with the reform initiatives of the State, Internal Revenue Department is implementing Tax Policy and Tax Administration Reform under the Framework for Economic and Social Reform- FESR and Public Financial Management Reform Strategy – PFMRS. Internal Revenue Department aims to become an internationally recognized modern tax department which performs efficient tax administration with integrity. In doing so, the Official Assessment System is being transformed into Self-Assessment System.

Under Official Assessment System, tax office makes assessment based on the facts provided by the taxpayer. That system puts a lot of authorities in the hands of a tax officer as the individual tax officer is responsible for taxpayer service, tax audit and tax collection. It is a kind of human nature that a person is reluctant to his own money out. That kind of conditions could lead to negotiations. Therefore, to remove corruptive behaviors, the Self-Assessment System is going to be used as not all authorities will be put in the hands of a tax officer in the new system. Whereas there are limited resources in Internal Revenue Department, the Self-Assessment System was first introduced to Large Taxpayers Office in 2014 with 450 companies. The system is now successfully in place in Large Taxpayers Office. Similarly, it is underway that Self-Assessment System will be put in place for Medium Taxpayers Office (1) in 2016-17 fiscal year.