SJMS Budget Briefing 2016 features salient points and impact of tax implications

3 December 2015 06:30 pm Views - 2263

The Budget briefing was organised by SJMS Associates recently, focusing on the essential and salient points of the government’s 2016 Budget proposals with an added emphasis on its tax implications on Sri Lanka’s economy. The forum that included a panel discussion was presented exclusively for the firm’s clients and business associates and was held at Hotel Galadari, Colombo.

The panel of tax experts comprised of Dushani Chandrasiri, Assistant Commissioner, Department of Inland Revenue, M. B. Ismail, Managing Partner of SJMS Associates, Sarala Kodagoda, Partner of SJMS Associates, P. Sivasubramaniam, Tax Director and S. T. Gobalasingam, former Commissioner of Inland Revenue Department and Tax Consultant, SJMS Associates. 

Delivering the keynote address on the 2016 Budget, Chandrasiri focused on significant points whilst emphasizing the progressive nature of the budget proposals and its renewed emphasis on growth.

The panel critically reviewed some of the key proposals and presented an overall analysis, assessing the bottom line impact and its implications for both individuals and the business community. M. B. Ismail observed that the Budget received favourable response from the business sector for maintaining a very delicate balance. Emphasis has been on indirect taxes to cover up the shortfall on direct taxes which was to be raised to 40 percent from the current 20 percent of total tax collection has been reduced to 14 percent of total collection.  

Sarala Koddegoda stated that the Minister of Finance had clarified certain proposals regarding company registrations and annual fees, etc. She further commented on exemption of transfer pricing regulation for the local companies as it does not result in base erosion. Participants’ interaction was lively and responsive where they had the opportunity to clarify from the resource persons and the panellists. 

Meanwhile, SJMS Associates Kandy organised a Budget Briefing seminar recently at the ICBT Campus Auditorium - Kandy. SJMS Associates Kandy established in 1932 with the introduction of income tax to Sri Lanka. The noticeable feature of this briefing was it addressed in all three languages for the benefit of the audience. Further, the panel issued “Paying Income Taxes-FAQs” with Sinhala translation which has covered more than 100 frequently asked questions and answers by the tax payers.

The panellists were W.M.N. Wickramasinhe, Commissioner of Inland Revenue Department - Kandy region, A. M. Nafeel, Deputy Commissioner of Inland Revenue Department, Colombo, M. B. Ismail, Managing partner of SJMS Associates, Gobalsingam, Tax Consultant, R. Rajendran, Resident Partner – SJMS Associates Kandy, Janaka Warnakula, Author in Taxation. 

Presenting the keynote speech Rajendran stated that tax free allowance has been increased to Rs.2.4 million which the majority of the tax payers in Kandy will be exempted from income tax from 206/ 2017. The chief guest Rawana Wijeyeratne, the Managing Director of the Sinhaputhra Finance PLC, stated that Budget proposals are made with two objectives. One is to win an election other one is to carry the country forward. However, Ismail noted while concessions and incentives are announced for sectors, it was disheartening to see there was no emphasis on productivity and quality improvement across all business sectors which is a dire need for economic growth.    

Wickramasinhe noted that they are in the process of taking necessary action to enhance tax payers’ awareness in the Kandy region. It was also highlighted on the concessions given to agricultural and SME sectors reflecting the intention of the government to enhance the quality of life. Addressing the triple tax deductions available for research and development (R&D) activities that will be extended to accommodate endowments given to national universities, as a results the business community is encouraged to be involved in the research and development activities.

Gobalasingham meticulously described amongst other factors the changes in indirect taxes. He pointed out the rationale behind each proposal. It was also noted that utilities such as electricity charges may go up in near future due to removal of exemptions on VAT. Viraj Kumara explained the impact on the business community i.e. the removal of restrictions imposed on transfer of land by foreigners will be largely affecting the Kandy region. Further, he explained the impact on enhancing the charges of voluntary liquidation and annual license fee of companies.

SJMS Associates is an independent correspondent firm to the global professional services firm Deloitte Touche Tohmatsu. The firm provides services that assist the growth and competitiveness of businesses, including assurance and advisory, tax and regulatory, financial advisory services, consulting, restructure and corporate recovery and investment opportunities.