The new law which has already been drafted will make it easier for authorities to collect back taxes and lay down procedures to do so.
A committee will also be set up under the direction of the president, to examine whether the concerned individuals are alive, and whether the companies concerned are still in operation and find ways to go forward in each case, the official said.
The proposal has already been approved by the cabinet of ministers and the draft law is with the island's Attorney General, who is examining its compliance with the constitution, the official said.
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Sri Lanka's Inland Revenue Department was set up in 1933, when the island was still under the British, and income tax was started in 1932, according to the website of the department.
It was started by amalgamating stamp and estate duty collection offices.
In Sri Lanka state corporations make huge