A Brief Colonial History Of Ceylon(SriLanka)
Sri Lanka: One Island Two Nations
A Brief Colonial History Of Ceylon(SriLanka)
Sri Lanka: One Island Two Nations
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Thiranjala Weerasinghe sj.- One Island Two Nations
?????????????????????????????????????????????????Sunday, July 16, 2017
VAT is to be done away with!
With
the implementation of the proposed Inland Revenue act, the VAT will be
simplified and subsequently done away with, and indirect tax revenue is
to be brought down, the finance ministry expects. Ministry sources say
that as much as 80 per cent of state tax revenue comes from indirect
taxes, pressurizing the majority low-income families, and the government
intends ease that pressure and to raise the 20 pc direct tax revenue.
The new act proposes a tax system based on individual income, and there
will be no increase of the taxes paid by all the masses as claimed
falsely by some. Certain gangs that swindled assets during the Rajapaksa
regime are behind a plan to sabotage the new act that will give relief
to the majority low-income people.
Ministry sources also say the existing tax system is very complex.
Haphazard amendments resulted in both the government and the public
facing inconveniences that had been going on like a cycle in the past,
with the VAT amendments being a case in point. Several times, amendments
brought tax relief for many items it covers, but the low-income people
did not gain any advantage, due to the prevailing situation in which
giving relief and maintaining tax revenue both have to be balanced. The
VAT reduction brought the taxes down on some goods only being consumed
by a limited number of consumers.
The government takes the lead in economic growth, job generation and
elimination of poverty, and at the same time it has to strengthen
institutions, increase competition and maintain state financial
stability and to modernize the tax policy by including policies on
international trade relations.
In such a scenario, the proposed tax act will not burden the low-income
people by the 14 pc PAYE tax on the agricultural sector, 14 pc tax on
EPF investments, 14 pc tax on exports and the 14 pc tax on the hotels
industry. Bringing banking, insurance, leasing, IT product exports,
container re-exportation under the 14 pc tax are not direct tax burdens
on the public and intends to raise direct tax income in the event of
minimizing indirect taxes, the sources say. It is unfortunate that some
say the new act is introduced on World Bank and IMF recommendations to
burden the public. Whatever those falsehoods say, a WB report in June
pointed out the new tax system should act as a security net for low
income people. Therefore, the people should look at this with an open
mind.
Kashyapa Kotelawala