VAT income in January, projected at Rs. 55 billion, has met with a shortfall of Rs. 10 billion, said finance ministry sources.
This reduction in tax income is attributed to an organized extortion racket by inland revenue officers targeting liquor outlets, casinos, night clubs etc.
Instead of tax collection, these officers are extorting money from vulnerable institutions, it is learnt.
Police too have received a number of complaints in this regard.
Minister Manusha Nanayakkara and MP Mahindananda Aluthgamage asked the president recently not to trust the information given him by the finance ministry and its affiliate institutions.
