ECONOMYNEXT – Sri Lankan doctors are leaving the country not because of higher taxes as they claim, but due to the education of their children, ruling party legislator Mahindanada Aluthgamage said.
Sri Lanka has seen an exodus of qualified doctors and consultants mainly after the government raised ‘pay as you earn’ (PAYE) taxes early this year, citing they can’t bear the high taxes.
However, health ministry sources say most doctors planned the exit soon after the country declared bankruptcy in April last year with sovereign debt default.
Health experts say the deterioration in the sector is evident with well qualified doctors are migrating for jobs in other countries.
The Government Medical Officers’ Association (GMOA), a powerful trade union which in the past has been politically motivated has cited higher taxes as the reason for the doctors exodus.
“We cannot accept that doctors are leaving because of higher taxes,” Aluthgamage, the chair of the Parliament Sectoral Oversight Committee on National Economic and Physical Plans, told reporters on Tuesday (26).
“They have to pay over 50 percent tax in the United States. They pay 45 percent tax in Britain. So, they pay higher taxes higher than Sri Lanka,” he said.
“They are leaving because of the education of their children. They should say the truth and leave rather than saying it is because of higher tax.”
Sri Lanka is struggling to meet its 2023 revenue targets committed to the International Monetary Fund (IMF) in return to a $3 billion loan programme from the global lender.
The IMF has estimated a revenue fall of 15 percent for this year due to poor tax administration and collection.
Most doctors have not been paying taxes despite higher income from private channelling. However, the PAYE tax has covered most of the doctors in the state sector.
More than 1,000 doctors and consultants have already left the country since the economic crisis led to an unprecedented sovereign debt default last year.
The government has been considering to recall retired doctors to fill the deficit created by the exodus. (Colombo/September 27/2023)