Govt will crack down on businesses not passing tax cut benefits to consumers
Legal action will be taken against businesses which do not pass on the benefits of tax cuts to VAT and other tax relief to the public, State Minister of Development Banking and Loan Schemes Shehan Semasinghe told reporters Monday, in Colombo.
He said that the government decided to reduce VAT to 8 per cent to reduce the price of goods while other tax benefits will help people save money and increase their purchasing power.
Semasinghe answered critics who point out the loss of revenue to the countr due to tax cuts by saying that the government does not intend to strengthen itself by levying taxes on everything.
But he said the goal of the government is to reduce waste and corruption and cut back on unnecessary spending and save money for the people and re-integrate them into the economic process of the country.
Economists as well as multi-lateral agencies have warned that the tax cuts could increase the budget deficit in 2020. Last week the Parliamentary Budget Committee said that it also opposes the cuts on VAT.