Government says ready to be flexible on tax policies

24 December 2022 08:30 am Views - 2949

From left: Finance State Minister Ranjith Siyambalapitiya and Finance Ministry Secretary Mahinda Siriwardana
PIC BY KITHSIRI DE MEL

 

• Finance State Minister Siyambalapitiya says tax policies are not written in stone
• Highlights need for alternative proposals, if current tax policies are to be amended
• Says only limited scope to change current tax policies as govt.’s financing sources remain limited 
• Asserts govt. revenue needs to be increased at least 17% of GDP, from estimated 11.3% of GDP this year 

By Nishel Fernando
While stressing the tax policies are not written in stone, the government said it is ready to be flexible to amend such policies, given that there are pragmatic alternative proposals to collect tax revenue foregone.

“None of these (tax policies) are written in stone. We are always flexible to listen to your proposals. However, you also need to present alternative proposals,” Finance State Minister Ranjith Siyambalapitiya told the private sector representatives at the inaugural tax seminar series that kicked off yesterday.

However, Siyambalapitiya pointed out that there is only limited scope to change the current tax policies, as the government’s financing sources remain limited to maintain public education, public health and social security programmes. “We are asking the top 10 percent income earners of the country to support the rest of the 80 percent of the population of the country through direct taxes. If we reduce this (direct taxes) to only be applicable to the top 5 percent income earners, then we can’t reach our goals,” he added.

Siyambalapitiya acknowledged that even a person with a monthly income of Rs.200,000 might be struggling to meet his or her expenditure with lease payments on vehicles and interest payments on loans. Despite these difficulties, he stressed that there are no alternatives.  “We know it’s a burden for someone earning Rs.150,000 to pay Rs.3,000 in income taxes per month.

We are in an extremely difficult situation. We don’t make decision like robots,” he went on to say.

Having said that, Siyambalapitiya noted that if there are alternative proposals to replace certain taxes or reduce the tax rates, the government is flexible to listen. 

Siyambalapitiya stressed that the government revenue is required to be increased to at least 17 percent of GDP, from an estimated 11.3 percent of GDP this year, in order to meet the essential expenditure.