30 November 2023 12:06 am Views - 176
Mahinda Siriwardana
By Shabiya Ali Ahlam
Treasury Secretary Mahinda Siriwardana yesterday expressed confidence in the measures taken by the authorities to increase government revenue through taxation, bringing about a positive outcome next year.
While the tax reforms implemented from the middle of last year caused a shock to the business community and public, Siriwardana emphasised that such measures were essential for
fiscal consolidation.
“Next year we are expecting growth to come to positive territory. So, that will also help and then the full impact of the tax reforms that we have been implementing from last year and also this year would be seen in 2024.
So, all together, we expect that we would basically be able to get this revenue envisaged,” Siriwardana told Sri Lanka Economic Summit 2023, organised by the Ceylon Chamber of Commerce in Colombo, yesterday.
The 2024 budget saw the setting of an ambitious tax revenue goal, which according to some economists and analysts, is unlikely to be realised. As per the 2024 budget, Sri Lanka aims to expand its tax revenue by approximately
47 percent.
However, reaching the goal is easier said than done, given that the island nation’s tax administration is quite poor and
requires strengthening.
Siriwardana shared that various measures are underway to enhance the tax framework in the country, with a primary focus on three key areas: administration, compliance and digitisation.
“We have still not been able to fully implement certain systems and bring in digitisation as much. The issues cannot be resolved overnight but we have to start somewhere.
So, that is why at present a comprehensive effort is being put to improve tax administration and compliance reform is ongoing,”
he said.
He added that tax is an area that is being monitored “very closely”. Relevant departments have been given specific instructions on the actions to take to collect taxes and increase tax filing.
“It is a combination of policy as well as the administration. I should re-emphasise the fact that it is tax administration that would generate the expected revenue. This is not a sort of single effort,” he said.
The International Monetary Fund, in its latest review, stressed that Sri Lanka should aim to have its government revenue expanded to about 12 percent of GDP, to avoid a revenue shortfall next year.