5.2. Recommendations 
Recommendations are suggested here after considering the results of the hypothesis 
tests in Chapter 4 and with a view to increase tax compliance by using better IT 
facilities. 
(i). Introducing EFT, Credit Card, ATM and direct debit facilities for tax payments. 
At the beginning, this can be started as a pilot project for those who are willing to 
accept those facilities. 
(ii). providing e-filing facilities for those who have facilities and willingness. 
(iii). Enhancement of IT resources in the Department of Inland Revenue with a view 
to increase tax compliance as well as to save time of both revenue staff and tax 
payers. 
(iv). Identification of capable officers with IT awareness and using them for the key 
tasks in taxation process. 
(v). Using e-mail and SMS to remind payments and returns. 
(vi). Using address labels with bar codes for quick identification of non payer of tax 
on due dates and no submission of tax returns on due dates. 
(vii). Identification of new tax payers by processing received new information quickly 
by using IT. Electronic links should be established with Customs, Banks, Registrar of 
Motor Vehicles, Land Registry, Electricity and telephone companies and the 
international airport etc. 
(viii). Online tax advice service with facilities to tax calculations and updated 
legislation. 
5.3. Conclusion 
Tax collection in Sri Lanka, specially comparing with the other developing 
countries has several problems. Low Tax/GDP ratio and low compliance have been 
identified as main issues. According to the researches, there are many factors 
affecting the tax compliance. In many countries in the developed world have already 
been used IT as a supporting tool for tax collection. In Chapter2, there are a few 
examples which are successfully used in developed countries. This research also 
shows that IT can effectively be used in increasing tax compliance of Sri Lankan tax 
payers because there attitude towards IT usage in taxation is remarkably high and 
those who already use IT in business documentation have better tax compliance. 
47 
Annexure 1 
Questionnaire 1 
Serial No: 
Information Technology usage and Awareness level of Tax pavers 
Please indicate your usage/knowledge in the appropriate cage in the table given below 
according to the following choice type. 
Choices 
1. I have never used/1 have no idea. 
2. I know that but I do not use 
3. I use but not for business purpose.(personnel/entertainment etc) 
4. I use it in the business only for limited activities. 
5. 1 use it for day to day business activities. 
Information Technology Usage Choice 
1 Fax machine 
2 Credit Card 
3 Electronic Fund Transfer 
4 Personnel Computers 
5 Local Area Network 
6 E - mail 
7 Internet 
8 Bar codes/Bar code readers 
9 Database Management Systems 
10 SMS 
11 Voice mail 
12 Accounting packages 
13 Spreadsheets 
14 Tele-banking 
15 Search engines 
16 Automatic Teller Machines 
17 Desk top publishing 
18 Electronic word processing 
19 Transactions through Internet 
20 GPRS 
Total 
Thank you for your time! 
Annexure 2 
Questionnaire 2 
Serial No: Income Tax File No: V A T No: 
Level of the attitude on Information Technology of a tax paver 
Please indicate your desire according to the choices given below in the appropriate cages 
in the table given below. 
Choices 
1. I strongly disagree/I strongly do not want. The present manual system is the best. 
2. I do not want. The present manual system is OK. 
3. 1 agree but not necessary. The present manual system is enough. 
4. I agree 
5. I strongly agree/1 like it very much 
Information Technology facilities choice 
1 Address labels with bar codes 
2 SMS/E-mail reminders for payments and returns 
3 e-filling facilities to submit returns 
4 Payments by credit cards 
5 Payments by Electronic Fund Transfer 
6 Online tax consultancy 
7 Direct debit of bank accounts for tax payments 
8 Tax payments through ATMs 
9 Automatic penalty calculations for delayed returns and payments 
10 Issuing assessments through e-mail/fax 
Total 
Thank You for your time! 
Annexure 3 
Questionnaire 3 
Serial No: Income Tax File No: V A T No: 
Compliance level of a tax paver 
Please select the relevant choice and write the number of it in the appropriate cage in the 
table given below. 
Choices: 
1. 0% 
2. more than 0% and less than 20% 
3. more than 20% and less than 40% 
4. more than 40% and less than 60% 
5. more than 60% 
Measurement of the compliance Choice 
1 % of Income Tax returns submitted before due date in last 5 years? 
2 % of VAT returns submitted before due date in last 2 years? 
3 % of Income Tax payments paid before due date in last 5 years? 
4 % of VAT payments paid before due date in last 2 years? 
5 % No of years in which Income Tax assessments were not issued in 
last 5 years? 
6 % No of quarters in which VAT assessments were not issued in last 
2 years? 
Total 
Thank You for your time! 
Annexure 4 - Questionnaire 4 
IT awareness/ usage/ attitude level of revenue officers 
Please indicate the answer which is most relevant to you. 
Serial No: 
Designation: 
Section/Branch: 
Question 
No 
Question Answer 
1 I T Qualification: 1 .Degree/Professional 2.Diploma 3. Certificate 
4. No qualification 
2 I T Training: 1. Full time 2. Part time 3. On job 4. No training 
3 I T experience: 1 .Programing/Designing 2. User 3. Data entry 
4.None 
4 I T Usage at work: 1 .Return/payments processing 2. Inquiring 
only for required data at work 3. Data entry 4. None 
5 I T facility available: 1. PC network 2. Standalone PC 
2. Dumb terminal 4. None 
6 Communication facility: 1. Internet/e-mail/Telephone/fax 
2. Telephone/fax 3. Telephone 4. None 
7 Electronic Documents handling: 1. 100% 2. >50% 3. < 50% 
4. 0% 
8 What is your idea in introducing following facilities in your 
work? 
1.1 strongly agree 2.1 agree 3. No idea 4.1 strongly disagree 
(i). Bar codes/Bar code readers 
(ii). E-mail/SMS facilities for reminders and guidance to tax 
payers. 
(iii). E-filing of returns. 
(iv). On line/ EFT/Credit Card facilities for tax payments 
(v). Online connections with other organizations to get 
information. 
e.g. RMV, Customs, Land registry etc 
(vi). Do you think that introduction of above I T facilities 
w i l l increase the tax compliance? Total 
9 What is your average incentive ranking for the last 5 years? 
1.100% 2. Less than 100% but more than 80% 3. Less than 80% 
but more than 60% 4. Below 60% 
Thank you for your time! 
Annexure 5 
Questionnaire 5 
I T Usage level of various types of tax pavers (Collected from tax consultants) 
Please answer the following questions. 
Question Answer 
1 No of tax payers you are dealing with 
2 No of cooperate tax payers you are dealing with 
3 Average number of PCs per employee with your 
cooperate tax payers 
4 Average number of e-mail connections per 
employee with your cooperate tax payers 
5 Average number of Internet connections per 
employee with your cooperate tax payers 
6 No of cooperate tax payers who use software for 
accounting and tax documentation 
7 Average number of PCs per employee with your 
individual tax payers 
8 Average number of e-mail connections per 
employee with your individual tax payers 
9 Average number of Internet connections per 
employee with your individual tax payers 
10 No of individual tax payers who use software for 
accounting and tax documentation 
Thank you for you time! 
Annexure 6 
Questionnaire 6 
Evaluation of the IT usage and performance in various branches (Collected from Branch 
managers) 
Branch: Serial No: 
Average rating for incentives for the last 5 years: 
Please select your choice from the following choices: 
1. 100% Manual 
2. less than 50% computerized 
3. More than 50% computerized but not 100% 
4. 100% Computerized 
Question choice 
1 Return issuing 
2 Reminders issuing for late returns and payments 
3 Master Index 
4 Payments ledgers 
5 Statistics 
6 Return processing 
7 Processing of information received about tax payers from 
other parties 
8 Other correspondence and record keeping 
9 Issue of assessments 
10 Identification of new tax payers from the information 
received 
Total 
Thank you for your time! 
I N L A N D REVKN11E I N C E N T I V E FUND S C H E M E 
APPRAISAL F O R M 
Branch:. . . ._ . Period : Six monthes ended 
1 Name: 
2 Designation: 
3 Date of Joining the Department: 
4 Nature of Duties: 
5 Particulars of service in other Units/R.00 during the period under review 
' Duration Unit/R.OO 
6 Date of retirment/resignation (if applicable):. 
P A R T - 1 
Factors for Appraisal 
(a) 
Range of plus 
Points 
Output 
Very Good 40-50 
Good 26-39 
Average 13-25 
Below Average 0-12 
Quality 
Very Good 40-50 
Good 26-39 
Average 13-25 
Below Average 
Minus Points 
( i ) Attitude to work 
Very Good 
Good 
Average 
Below Average 
Average '0-12 
2-0 
5-3 
8-6 
11-9 
(ii) Minus points for leave 
Days Points 
No.of leave upto 
Plus points 
Awarded 
Total Points (A) 
Awarded 
Days Points 
6 1 No.of leave upto 18 12 
7 2 19 13 
8 2 20 14 
9 3 21 15 
10 4 » 22 16 
11 5 23 17 
12 6 " 24 18 
13 7 " 25 19 
14 8 26 20 
15 9 » 27 21 
16 10 No.of leave exceeding 27 22 
17 11 -
Total Minus points (B) 
NET POINTS 
Annexure 7 
"(A-B) 
Final Rating 
Net Points Rating 
75 - 100 100% 
6 5 - 7 4 95% 
5 5 - 6 4 85% 
4 5 - 5 4 75% 
3 5 - 4 4 65% 
0 - 3 4 0% 
Manager's Report on performance in relation to the work programme and targets 
CO 
00 
Consolidated Salary for the last month of 
the period referred to (excluding allowances) 
Total Leave taken for the period under review 
(i) Private leave (Medical,Casual, 
spent in Sri Lanka or abroad) 
(ii) Duty leave for training 
Less 30 days exemption 
Total leave for the purpose of determining minus points {ii (i) +ii (ii)} 
(iii) Duty leave for official purposes directly related to the duty 
I certify that the above parpliculars are correct. 
Deputy Coinmissioner/O.I.C./Manager 
Date: 
PART II 
Rating Conhrrmed 
Rating Moderated 
Percentage 
Date: 
for Chairman of the Committee 
Annexure 8 
C.I.R. (Outstation R.O.O.) 
Incentive Targets for 2nd Half of 2005 
COLOMBO REGIONAL OFFICES 
Marks 
01 Compliance 
-Up to Y/A 2003/2004 100% 
Implement the stop filer programme for non compliance cases 
30 
02 Audits 
A. Rapid Audits - 100% of returns received 20 
B. Group Field Audits (per branch) 
Initiate - 20 
Complete -10 
C. Detailed Audits (per assessor) 
Initiate - 04 
Complete- 03 
15 
15 
03 Appeals : * 
All appeals registered up to 30.06.2005 to be Settled or referred to 
appeal branch. 
Audi t Queries * 
All queries received up to 30.06.2005 to be replied 
* (minimum 10 from each target) 
12.5 
12.5 
04 Updat ing the tax payer's Index 
i. To edit and feed to computer all the balance cases 
ii. Cases already fed to the computer -
Check the correctness of the data and updated data 
should be sent to CDU by August 15, 2005. 
50 
05 Reduction of Arrears: 
(a) 100% of agreed and on return taxes prior to 31.12.2005. 
(b) 75% of agreed and on return taxes for the period of 01.01.2005 
to 30.09.2006. 
(c) 100% of arrears getting time barred on 30.06.2006 
(d) 20% of other arrears outstanding as at 30.06.2005. 
50 
06 Revenue: 
100% of revenue estimated for 2005 250 
07 Opening of New Files 
100 New VAT and ESC Files 
60 
08 Back Duty - for the Branch 
20 million 
60 
Back duty collection 50% of the back duty agreed 
09 Refunds 
All valid refunds received up to 30.09.2005 
25 
600 
General 
• Award 4.5 will be considered for branches only with all round exceptional 
performance. 
• Appeals i f any for the above targets should be submitted w i t h alternative 
targets to D.C. Secretariat on or before 31.07.2005 
Minus Marks 
(1) Non submission of monthly progress reports, monthly incentive 
performance reports before 15 t h of the following month, and area 
performance report before the date notified by the C.G.I.R. and 
submission of incorrect reports. 
(2) Dishonoured cheques not attended to within one month of receipt 
(3) Paying-in-slips received up to 30.11.2005 posting not completed by 
31.12.2005 
(4) Unsatisfactory record keeping and office maintenance 
(5) Violation of official language regulations 
10 
10 
10 
10 
10 
2005 
Commissioner General of In land Revenue 
Annexure 9 - Summarized results of Questionnaire 1 and 3 
A B C A B C A B C 
1 78 23 41 49 16 81 49 15 
2 85 24 42 65 17 82 49 15 
3 84 23 43 67 14 83 58 16 
4 78 22 44 68 16 84 56 19 
5 46 16 45 79 19 85 89 27 
6 25 12 46 89 21 86 33 8 
7 89 24 47 55 20 87 30 10 
8 55 15 48 68 20 88 80 20 
9 66 16 49 67 21 89 94 22 
10 78 17 50 86 23 90 55 20 
11 78 19 51 43 12 91 68 20 
12 26 10 52 47 14 92 67 21 
13 65 18 53 35 12 93 86 23 
14 66 15 54 37 11 94 43 12 
15 64 14 55 53 13 95 47 14 
16 44 10 56 63 18 96 35 12 
17 55 18 57 39 13 97 37 11 
18 48 15 58 49 15 98 53 13 
19 47 16 59 49 15 99 63 18 
20 94 26 60 58 16 100 39 13 
21 52 14 61 56 19 
22 51 14 62 89 27 
23 53 13 63 33 8 
24 43 12 64 30 10 
25 47 14 65 80 20 
26 35 12 66 94 22 
27 37 11 67 78 21 
28 53 13 68 95 24 
29 63 18 69 55 14 
30 39 13 70 48 15 
31 49 15 71 47 16 
32 58 16 72 94 26 
33 56 19 73 52 14 
34 89 27 74 51 14 
35 33 8 75 53 13 
36 30 10 76 43 12 
37 80 20 77 37 11 
38 94 22 78 53 13 
39 78 21 79 63 18 
40 95 24 80 39 13 
A - Serial number given to the form, B - Total of responses to Questionnaire 1 
C - Total of responses to Questionnaire 3 
Annexure 10 - The Summarised results of Questionnaire 2 and 3 
A B C A B C A B C 
1 41 23 41 25 16 81 25 15 
2 45 24 42 32 17 82 26 15 
3 43 23 43 33 14 83 28 16 
4 40 22 44 34 16 84 27 19 
5 28 16 45 40 19 85 43 27 
6 15 12 46 42 21 86 16 8 
7 44 24 47 26 20 87 15 10 
8 29 15 48 37 20 88 41 20 
9 33 16 49 32 21 89 44 22 
10 39 17 50 41 23 90 23 20 
11 42 19 51 20 12 91 30 20 
12 14 10 52 21 14 92 35 21 
13 32 18 53 15 12 93 40 23 
14 35 15 54 16 11 94 21 12 
15 30 14 55 27 13 95 22 14 
16 25 10 56 33 18 96 18 12 
17 25 18 57 21 13 97 18 11 
18 25 15 58 25 15 98 26 13 
19 24 16 59 26 15 99 30 18 
20 49 26 60 31 16 100 21 13 
21 24 14 61 29 19 
22 25 14 62 43 27 
23 26 13 63 17 8 
24 21 12 64 14 10 
25 23 14 65 42 20 
26 18 12 66 45 22 
27 18 11 67 35 21 
28 26 13 68 42 24 
29 35 18 69 23 14 
30 18 13 70 24 15 
31 25 15 71 24 16 
32 26 16 72 44 26 
33 24 19 73 22 14 
34 42 27 74 26 14 
35 15 8 75 25 13 
36 16 10 76 22 12 
37 42 20 77 17 11 
38 39 22 78 29 13 
39 35 21 79 31 18 
40 44 24 80 19 13 
A - Serial Number given in the form 
B - Total of responses to Questionnaire 2 
C - Total of responses to Questionnaire 3 
Annexure 11- Summarised Results of Questionnaire 4 
A B C A B C A B C 
1 20 1 41 28 2 81 22 2 
2 22 1 42 19 1 82 23 2 
3 18 1 43 19 2 83 25 1 
4 44 3 44 25 2 84 28 1 
5 23 2 45 26 1 85 27 1 
6 22 2 46 23 2 86 29 1 
7 26 2 47 27 1 87 23 2 
8 24 2 48 35 2 88 26 3 
9 20 2 49 31 1 89 35 2 
10 21 2 50 20 1 90 34 1 
11 24 1 51 24 1 91 40 2 
12 20 2 52 19 1 92 20 2 
13 21 1 53 32 2 93 21 2 
14 21 1 54 25 2 94 32 3 
IS 22 2 55 22 2 95 19 1 
16 25 2 56 20 3 96 33 2 
17 26 2 57 21 3 97 46 3 
18 28 2 58 23 2 98 28 2 
19 20 1 59 39 3 99 22 3 
20 27 2 60 38 1 100 21 2 
21 15 1 61 33 3 
22 21 1 62 29 3 
23 23 1 63 41 2 
24 36 3 64 40 2 
25 35 3 65 48 3 
26 26 2 66 36 2 
27 29 2 67 16 1 
28 28 2 68 18 1 
29 24 1 69 17 1 
30 20 1 70 31 2 
31 28 2 71 43 3 
32 27 1 72 19 1 
33 25 2 73 33 2 
34 29 1 74 30 3 
35 21 1 75 17 1 
36 30 2 76 25 3 
37 30 2 77 26 2 
38 30 3 78 33 3 
39 40 1 79 34 3 
40 16 1 80 25 2 
A - Serial Number given in the form 
B - Total of choices 
C - Choice about the Incentive Rating 
Annexurel2 - Results of Questionnaire 6 
Branch No Total of choices 
Average 
Incentive Rating 
1 30 4 
2 32 4 
3 15 4 
4 12 4 
5 14 4.3 
6 10 3.8 
7 18 4 
8 22 4.5 
9 24 4.3 
10 12 3 
11 16 4 
12 14 4 
13 12 4.5 
14 12 4.5 
15 12 4.3 
16 12 4 
17 16 4 
18 18 3.4 
19 14 4 
20 14 4 
21 15 4 
22 16 3.5 
23 12 3.5 
24 12 4 
25 14 4 
26 17 4.5 
27 22 4 
28 22 4 
29 26 4 
30 26 4 
31 28 3.4 
32 22 4 
33 12 3.5 
34 12 4.3 
35 14 4 
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