Tax structure needs to be reformed

Sri Lanka has the capacity to increase revenue to 17% of GDP by end 2011 and thereafter by about 0.75% each year for the next three years but to get closer to this goal there are some areas of concern in the tax system that need to be addressed to said Executive Director IPS Dr. Saman Kelegama.

Delivering the 14th tax oration themed ‘Anomalies in the taxation system in Sri Lanka need for reform and restructure’ - Dr. Kelegama said that anomalies in the VAT system, problems with Income tax in Sri Lanka, why public servants and politicians should pay taxes, anomalies in the super incentive structure of the BOI, can we earn more revenue by reducing import taxes particularly for motor vehicles, making provincial councils less dependent on government transfers as well as the problems and constraints of the current tax administration should be addressed.

‘Sri Lanka is on the verge of entering a new era of growth as the country moves from a war economy to a peace economy its development challenges will be many, but if we are to leverage on this opportunity and secure a sustained growth trajectory,embarking on urgent policy reforms is the need of the hour,’ said Dr. Kelegama. SG