Wednesday, May 22, 2024

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COPF suggests the taxing on non – cash benefits of President, MPS, officials

Sri Lanka aims at increasing tax revenue by 69 percent to Rs.3,130 billion this year from Rs.1,852 billion in 2022 while bringing down the budget deficit to 7.9 percent in 2023 from revised 9.8 percent in 2022.

The high tax revenue target comes as millions of Sri Lankans face the impacts of the ongoing economic crisis – 66 percent inflation, job losses, and shrinking disposable income.

In this contect the Chairman of the Committee on Public Finance, MP Dr. Harsha De Silva recently emphasized that a system should be implemented to collect taxes properly on non- cash benefits starting from the President of the country to all Ministers, Members of Parliament and officials.

Non-cash benefits include vehicles, houses, employees, etc. owned by a person holding a certain position. Thus, these taxes should be carefully looked into, considering all elements, he added.

The Chairman made this observance when the Inland Revenue Department was summoned by the Committee on Public Finance (COPF) on Tuesday to discuss the Road Map for Tax Collection for the year 2023.

The Inland Revenue Commissioner General pointed out during the discussion that the amount of tax collected in the year 2022 is Rs. 860 billion and the amount of tax expected to be collected for the year 2023 is Rs. 1,667 billion in amount.

Accordingly, compared to last year, it is expected to receive more tax money amounting to 922 billion rupees this year, he said.

The largest amount which is Rs. 603 billion as expected tax revenue in 2023 is expected to receive from corporate income tax. The local revenue officials also indicated that an income of 553 billion rupees is expected from the value-added tax (VAT).

The committee also discussed at length the strengthening of this tax collection program and the Department of Inland Revenue gave information about the problems including the delay in the cases in the court related to tax payment defaults.

The chairman of the committee said that the COPF will intervene to review these problems and provide solutions.

Accordingly, the chairman of the committee informed the Inland Revenue Department to report to the committee in February about the progress of tax collection.

The attention of the committee was also drawn to some media reports that taxes were levied on the pension of disabled war heroes. The officials of the Inland Revenue Department pointed out that no such tax is levied on a pension in any way.

The regulations in Gazette No. 2307/12 under the Import and Export Control Act were also submitted to the committee for approval. This gazette was published to ease the import restrictions imposed on sports items, railway spare parts, and certain items in the cosmetics industry.

The committee approved the gazette and stressed that it is preferable to allow the import of products required for industries such as tourism and cosmetics under the recommendations of the relevant institutions by charging a higher tax.

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