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Tax revenue collectors to launch massive protest campaign today

In a move to express its displeasure over the new Special GST Act, the country’s top tax collectors of the Excise Department, Sri Lanka Customs and the Department of Inland Revenue will team up to launch a massive protest against the Ministry of Finance on Tuesday 8.

The trade union collective of the Department of Excise addressing a press briefing yesterday said that they will team up with the other leading tax collecting authorities to fight against the ‘unfair’ Special Goods and Services Tax Act, which was gazetted on January 07th.

As a result, the Excise Department trade union will hold hands with the TUS of the Department of Inland Revenue, Sri Lanka Customs, Department of Motor Traffic (Dmt), telecommunication Regulatory Commission of Sri Lanka (TRCSL), and Sri Lanka Export Development Board to launch this protest.

Co-secretary Unity of Excise Trade Unions Nirosh Jayakody said by introducing the Special GST Act the government is planning to set up a single small unit to gather all the tax revenue collected from the aforesaid authorities in the future to be sent to the Treasury.

Government is all set to introduce Special Goods and Services Tax (SGST) in a major reform of the country’s taxation by enacting the new GST bill in parliament soon after its approval from the Cabinet of ministers, high official of the treasury divulged.

The new draft bill now being finalised by the Legal Draftsman’s Department will be presented to the cabinet with the endorsement of the Attorney General within two weeks, treasury secretary S R Attygalle said .             

Cabinet has already endorsed to draft a new Goods and Services Tax (GST) bill, which is aimed at simplifying taxes on alcohol, cigarettes, vehicles, telecommunications and betting.

The new GST proposed in Budget 2021 will improve the efficiency of tax collection with the introduction of an online-managed single tax which contributes considerably to state revenue, he added.

The proposed tax will make revenue collection easy for Excise Department removing the burden and time consuming process of collecting taxes and levies from 17 hard liquor manufacturers and two beer producers.

The Finance Ministry was working to have the SGST ready for implementation from the new tax year but it was delayed due to unavoidable circumstances.

Therefore the new SGST will be enforced with retrospective effect, a senior Inland  Revenue Department (IRD) official explained.     

However Inland Revenue Department had to reduce taxes on alcohol, tobacco, and gambling, manufacturing and financial industries from April 1, 2020 in accordance with the government’s new taxation policy, he added.

Revenue from liquor, tobacco, and gambling, which were previously taxed at 40 percent, will now be charged at 28 percent.

Trading, banking, finance and insurance will be taxed at 24 percent, compared to the previous 28 percent.

Manufacturing will be taxed at a new rate of 18 percent, down from the earlier rate of 28 percent.

Excise duty Revenue generated from Excise duty declined by 12.8 percent to Rs. 111.3 billion in the first four months of 2021, compared to Rs. 127.6 billion in the same period of 2020, Finance Ministry data showed.  

This was mainly due to the decline of revenue from motor vehicles, cigarettes and petroleum products despite the gains in revenue from liquor and other excisable articles.

Excise duty revenue accounted for 26.0 percent of the tax revenue and 23.1 percent of the total revenue collected in the first four months of 2) 021 while achieving 23.4 percent of the annual estimate, ministry data revealed.

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