Minister of Finance Mangala Samaraweera said that if Gotabaya Rajapaksa’s tax reforms are implemented the country will face bankruptcy like Greece or Venezuela.
Samaraweera told reporters yesterday (17 Oct) that Gotabaya Rajapaksa is promising a six per cent cut in VAT which will reduce government earnings which go towards paying for health and education.
The minister also said that currently the estimated income for a year through VAT which 15 per cent is Rs 530 billion and said that if the VAT is to be reduced to 8 per cent then the estimated loss for a year will be Rs 415 billion.
Rajapaksa, he told a Colombo press briefing, also wants to reduce the PAYE tax, agricultural taxes and the telecommunication taxes.
Samaraweera pointed out that farmers are not taxed in Sri Lanka and only people earning Rs. 100,000 or more are paying income tax. the Mahinda Rajapaksa government charged the PAYE tax from the people’s whose salaries started from Rs 62,500.
“The current government was able to increase the PAYE tax limit from RS 62,500 to Rs 100,000 which as a result made 500,000 people free from taxes,” he added
He also said that they expecting to raise the limit further to Rs 125,000 in the next government.
Further, he said that Gotabaya should answer the question which is if he is going to reduce the VAT to 8 per cent how would he recover the loss that would incur as a result of it and from which sector is he going to cut down expenditure to recover the loss.
Minister also said that this year the government had paid Rs 777 billion as debt repayment for loans taken by the previous government and next year the government will have to pay the biggest debt repayment which amounts to Rs 1.1 trillion.
Further, the finance minister said that on 23 Oct a proposal will be tabled to parliament to remove the carbon tax and he also said that the election manifesto of the DNF presidential candidate will be launched on 1 Nov based on scientific and technical analysis.