Sri Lanka President halts new sub-national taxes, fees; simplification ordered

President Gotabaya Rajapaksa meeting an inter-ministerial committee set up to remove obstacles to industries and entrepreneurs.

ECONOMYNEXT – President Gotabaya Rajapaksa has directed Provincial Councils and Local Authorities not to charge any new taxes or fees and simplify them within 30 days, his office said.

The administration is trying to simplify the country’s entire tax and non-tax system in a bid to make public life easy, reduce transaction costs and reduce corruption and irregularities, Secretary to the President P B Jayasundera had told Governor and Chief Secretaries.

“It has been observed that Provincial Councils and Local Authorities continued to expand various taxes, rates and levies undermining the Government’s overall development vision and underlying strategy”, Jayasundera was quoted as saying.

“The Government appreciates the revenue concerns of devolved administration but highlights the need to be logical in fiscal devolution and revenue sharing arrangements in a coherent National Policy Framework.”

Charging their own taxes, allow local government bodies some financial independence.

Sub-national authorities are given motor vehicle license fees and several other sources of revenue in addition to a block grant from the central government for the work they do.

They may also charge building permits and other fees. (Colombo/Feb19/2020)

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