The impact of income tax default to tax revenue in Sri Lanka.

Abstract

The objective of the study is to analyze what is impact of income tax default and arrears collection? And to identify factors influence in defaulting income tax in SriLanka. Major part of the government revenue is collected through the well-defined system of tax administration for the survival of the country. The tax system helps the government to generate the public revenue for the economic development of the country. There are different categories of taxes are charged from various sources of income. Although there are numbers of tax defaults are identified, this study consider the only income tax default and due collection. This area of research did not appear to have been previously studies in Sri-Lanka context and in this respect the research represent an original contribution while research have been conducted in SriLanka.. This study used quantitative component from which numbers of convergent results emerged. The total income tax revenue and income tax defaults as key indicators for a period of twelve years was considered as a secondary data for this study. The findings indicated through test of correlation that the tax revenue and tax arrears collection showed positive correlation and rejected null hypothesis and penalty was not significantly performed.