Sri Lanka tax department set targets to rope in tax payers
Apr 03, 2018 06:32 AM GMT+0530 | 1 Comment(s)
ECONOMYNEXT – Sri Lanka’s tax department has been set monthly targets to rope in more people into the tax net which is among the weakest in the Asian region, Finance Minister Mangala Samaraweera said.
“I have set a target with the Inland Revenue Department,” he told a news conference to explain details of the new Inland Revenue Act which came into effect on 1 April 2018.
“They must open 200 new files a month.”
Samaraweera said only 18 percent of the island’s 20 million people pay income tax.
“We can reduce direct taxation by widening the tax base with more direct taxes,” he said. “Direct tax collection in Sri Lanka compared with the rest of the world is very low.”
In Malaysia direct taxes account for 72 percent of government revenue, 54 percent in India, 45 percent in South Korea and 32 percent in Bangladesh.
The numbers indicate that rich businesspeople and professionals were not paying enough taxes with ordinary workers bearing a disproportionately higher tax burden, Samaraweera said.
“The main aim of the new act is to widen the tax base and simplify taxation,” he said. “It is a more socially equitable law.”
Thanuja Perera, tax advisor to the fiscal policy department of the finance ministry, said there were only 1.6 million income tax payers in the island.
“Only a very small number of people are paying taxes,” she said. “With the removal of tax exemptions under the new law and better implementation by the Inland Revenue Department we are working on expanding the tax base.”
(COLOMBO, April 03, 2018)