Tax collection a key focus in interim budget

30 August 2022 02:20 pm 4 Bookmark

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President Ranil Wickremesinghe presenting an interim budget today for the remainder of 2022 highlighted the efforts the government will take to firm up the tax administration which in turn will help increase the much-needed tax revenue.

In an effort to reduce the tax revenue bleed and capture a larger proportion of the working population in the system, Wickremesinghe, in his capacity as the Finance Minister said those above 18 years of age are urged to register with the Inland Revenue.

Further, to increase tax collection, the interim budget 2022 announced the increase of Value Added Tax (VAT) from 12 percent to 15 percent from 1 September 2022.

The Inland Revenue Department (IRD) has a very high proportion of defaulted taxes and unpaid penalties which are only expanding every year.

Sri Lanka at present has complex tax legislation and poor tax administration that has resulted in the direct to indirect tax ratio being 20:80, which ideally should be the opposite.

<div style="text-align: justify;">President Ranil Wickremesinghe presenting an interim budget today for the remainder of 2022 highlighted the efforts the government will take to firm up the tax administration which in turn will help increase the much-needed tax revenue.</div> In an effort to reduce the tax revenue bleed and capture a larger proportion of the working population in the system, Wickremesinghe, in his capacity as the Finance Minister said those above 18 years of age are urged to register with the Inland Revenue. Further, to increase tax collection, the interim budget 2022 announced the increase of Value Added Tax (VAT) from 12 percent to 15 percent from 1 September 2022. The Inland Revenue Department (IRD) has a very high proportion of defaulted taxes and unpaid penalties which are only expanding every year.<center><a href="https://www.hi.lk/himag" target="_blank"><img src="https://bmkltsly13vb.compat.objectstorage.ap-singapore-1.oraclecloud.com/cdn.sg.dailymirror.lk/assets/uploads/advr_7fec3b236e.jpg" /></a></center> Sri Lanka at present has complex tax legislation and poor tax administration that has resulted in the direct to indirect tax ratio being 20:80, which ideally should be the opposite.

It is a body comprising companies such as Amazon, Apple, Booking.com, Expedia Group, Google, GoTo, Grab, LINE, LinkedIn, Meta, Rakuten, X and Yahoo.

Comments - 4

Percy Wijenayake Wednesday, 31 August 2022 07:53 AM

To implement tax increases and revenue is a difficult task, unless the tax officials come clean and hound the business community and private medical practices. Declaration of income and assets by every individual over 18 must be compulsory or no employment in any enterprise. Inflating the Bill of Quantities and Cost for all contractual projects must cease and upgrade the contract administration procedure.

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Percy Wijenayake Wednesday, 31 August 2022 08:00 AM

Large scale development projects must not be approved if the feasibility studies fail

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Percy wijenayake Friday, 02 September 2022 09:12 AM

Another group that must be investigated are private tuition schools, landlords rental income from condominiums and large houses. Visit these places and demand their accounts and tax returns. Prune the public service and review the free education only for the needy. Encourage the public to inform the Inland Revenue.

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firdhous Tuesday, 13 September 2022 05:24 PM

What a crazy approach it would be pay more attention on tax collection in an ailing economy! Rather it would be FDI, export development and waste / cost cutting. When the government already have printed lot of currencies,,,, what is the purpose of tax,,,,,,,? When there is a price hike, it is the job of government to keep an eye on black market activities and dumping and or stocking. I said the same to the late president that to take all possible measures for a free and fair market activity and to curb on goods hiding and other sort of illegal and immoral activities. Willingly or not, it is the responsibility of the armed forces, police and CID to get into action and fulfil their responsibility towards the nation and the general public. I wish those responsible people will learn that the CIA was initially started to curb money laundering that severely effects the economy when the paper currency was used for the first time.

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