There are only 1,188 people in the island nation who have annual assessable incomes of over Rs 1 million a year, reports India Abroad News Service. Sri Lanka has a population of 18 million. According to the latest report of the Commissioner General of Inland Revenue (CGIN), there are 1,091 persons with assessable incomes of between Rs 1 million and Rs 5 million ($74,625), while only 97 persons have assessable incomes exceeding that. However, economists here are of the view that the number of millionaires in Sri Lanka is at least double the official figure of 1,188.

``There is a large number of millionaires with black money who don't figure in the tax department lists at all,'' an economist said. ``There are traders, share market speculators, arms dealers who get huge commissions and many others who make money in illegal trading or criminal acts like drug smuggling.They go undetected,'' he added.

Pointing out that the bulk of the annual defence budget, totalling Rs 57billion ($850 million), goes into arms purchases, he said: ``A number of arms dealers get a fair commission on those arms deals and all of them are millionaires. But they are not in the list maintained by the Inland Revenue.''

The Inland Revenue report, which was prepared from the data obtained from government and private sectors, reveals that only 68,422 people in Sri Lanka pay income tax. Special projects were undertaken to collect information about professionals, lawyers, doctors, real estate developers and mobile telephone owners for compilation of the report.

Total income tax revenue during 1997 was found to be Rs 89.5 billion ($1.3 billion), with the lion's share collected from turnover tax, which constituted 48.6 per cent of the total. While 24.2 per cent of the collection came from income tax, 19.4 per cent was obtained from the national security levy. The largest amount of income tax wascollected from the corporate sector, whose contribution had decreased to 65 per cent from 68 per cent a year earlier.

The CGIR report said the overall income tax collection of Rs 21.6 billion ($322 million) had decreased by Rs 188 million ($2.8 million) from the 1996 figure of Rs 21.78 billion ($325 million).