Govt. optimistic of enhanced tax revenue

The Government targets Rs. 312 billion tax revenue this year and already over 60 percent has been collected said Commissioner General, Inland Revenue, E.M.M. Medagoda addressing a seminar at the HNB auditorium on taxation organised by the International Fiscal Association (IFA) (Sri Lanka Branch).

He said measures have been taken to widen the tax net to enhance national revenue.The focus will be to create a tax friendly culture in the country and encourage those evading to pay taxes.

“Professionals will be required to pay taxes under the program to enhance Government revenue. Special concessions could be given to those who pay default taxes without delay”, Medagoda said.

“The Inland Revenue Department needs more trained personnel with adequate facilities for an effective tax administration.

Tax officials will be trained to make decisions without fear or favour”, the Commissioner General said. Tax experts said while recognising the importance of enhancing state revenue there is a long felt need to do away with certain taxes and simplify the taxation process.

Chairman, IFA (Sri Lanka Branch), N.R. Gajendran said while it is vital to focus on enhancing state revenue it is also important to rectify the deficiencies in the tax system.“It is a monumental tragedy to give permanent tax holidays for public servants, indefinite tax concessions for luxury items and tax holidays for BOI enterprises”, he said.

There should be a clear demarcation between policy making and tax administration to achieve unbiased results. Policy makers should influence decision making.Gajendran said the IMF loan will benefit the country but there will be enormous challenges.

Expenditure has to be curtailed or revenue has to be increased to get over the debt burden.Attorney-at-Law, Dr. Shivaji Felix said taxation should treat everyone equitably.

There is no agreement on what constitutes equitable treatment and as a result businessmen and professionals are reluctant to honour fiscal obligations.

He said one of the main problems that militates high level of compliance is the large number of fiscal enactments that makes taxation complicated.

LF