THE IMPACT OF SELECTED MANAGEMENT ACCOUNTING PRACTICES ON TAX REVENUE EFFICIENCY IN A PROVINCIAL COUNCIL IN SRI LANKA

The Provincial Revenue Department of the particular Province was established in the year 1991 with the objective of collecting provincial taxes of the particular Province as per the provision coated in the 13th amendment of the Sri Lankan Constitution. The Tax Efficiency Ratio (TER) of the Provincial Revenue Department- (PRD) of the particular Province is currently at 3:100 (Rupees). Which means that in order to collect one hundred rupees of tax revenue, the department has to spend three rupees. This implies a high rate of inefficiency with a still higher corresponding figure for the Inland Revenue Department of Sri Lanka at present is Rs. 0.40:100. The international standard for this ratio, covering the developed countries is Rs. 0.10:100 or less than that. The objective of this study is to review and analyze the current management practices and accounting controls and suggest ways and means of improving them which will in fore to improve the TER. The problems associated with Financial Accounting Controls, Management Accounting Controls and General Management Practices were studied in depth which resulted in identifying the Strengths, Weaknesses, Opportunities and Threats of the PRD. This resulted in identifying of recommendations which were made for the short term and long term and also for the Income aspect and Expenditure aspect. With proper design, development and implementation of the practices and controls it should be possible to enhance effectiveness and efficiency of the Provincial Revenue Department of the particular Province; and improvement of the Tax Efficiency Ratio to the required levels. Keywords: Provincial Tax Efficiency, Management Accounting Practices, Sri LankaFor full paper: fmscresearch@sjp.ac.l