Measures to automate revenue collection

New Inland Revenue Act:

By Lalin Fernandopulle

The new Inland Revenue Act to infuse more clarity and attract investors, will be ready by September this year, Finance Minister Ravi Karunanayake said last week while addressing the media on Deemed VAT introduced by the government to bring non-VAT registered small businesses and VAT registered enterprises to the same level.

The Minister said the new Inland Revenue Act will bring in more clarity and simplification to the tax system and it would raise tax administration to international standards.

Modernization and simplification through the fully automated Revenue Administration Management Information System (RAMIS) will help create a people-friendly and an efficient tax administration in the country. “Measures have been taken to fully automate the revenue collection system in the Inland Revenue Department and its results will be seen soon,” Karunanayake said.

When queried about the high taxes affecting the health sector, he said the government has granted several benefits to patients seeking health services and there is no truth that they are burdened by high taxes in the private medical care sector.

However, patients patronizing private sector hospitals said they have to pay through their nose due to the exorbitantly high medical bills that goes beyond their spending power.

“We would not have to suffer so much with the unbearable cost at private hospitals if State sector hospitals were equipped to provide a better service,” a patient seeking private health care medication said.

Patients who have no option but to seek State sector health care, have to remain in a waiting list for major surgery such has bypass operations and many succumb to the ailment by the time they get their turn. Poor State sector health care has driven middle income earners to seek private medication notwithstanding its high cost.

Karunanayake said with regard to Deemed VAT,the government stepped in to relieve the non-VAT paying small and micro sector retailers whose income is less than Rs. 33,000 a day by getting them to the VAT chain when VAT registered buyers purchase commodities from them. According to the revised VAT system that came into force last month, businesses with an income of over Rs. 1 million a month or Rs. 3 million a quarter are liable to pay VAT. Those liable to pay VAT have to transact with small enterprises which earn less than Rs. 33,000 a day and are not required to pay VAT.