Widen tax net to attract black money - Rienzie Wijetilleke

There is a huge black economy in the country and it was proved recently with the fraud of Sakvithi. Therefore, the tax net should be widened to attract this money as it will help the economy and reduce the budget deficit said Chairman, Hatton National Bank Rienzie Wijetilleke.

He was addressing a post budget seminar organised by KPMG Ford Rhodes Thornton and Co. on Friday. He said that more priority should have been given for health and education rather than allocating Rs. 600 mln for Mihin Air which is not a priority as budget airlines are the first to close down in this economic situation. Although 125,000 sit for the Advanced Level examinations only a mere 25,000 qualify to enter universities while the others have to find alternative study avenues.

Therefore, more emphasis should be paid and universities should be opened as it is a fundamental requirement. He said that when students go abroad for studies it is also a drain on our foreign exchange.

In most countries the policy for the way forward has been designed as a private public partnership but the budget has not encouraged it at all, he said.

Chairman, Ceylon Chamber of Commerce (CCC) Jayampathy Bandaranayake said the Government’s commitment to resolve the conflict is very welcome. He said the Government will do well if they keep the budget deficit at 6.5%. Bandaranayake said that the Government has identified special sectors for development by increasing the import duties; it is laudable but the implications are yet to be seen.

Chairman and CEO of Singer Sri Lanka Hemaka Amarasuriya said that the budget was able to hold the economy together for a short term. The emphasis of the budget is on local industries but we all know the quality of most of our products. In addition luxury goods have been hit and therefore businessmen will try to bend the law which will lead to many problems.

The Nation Building Levy will add to a lot of administration work. He questioned as to why we can’t make the tax structure simple. Amarasuriya welcomed the proposal to widen the personal income tax slabs. This is most welcome as it is a great relief to the middle management of all companies, he said.

Head of Tax KPMG Ford Rhodes, Thornton & Co. Premila Perera said that the Nation Building Levy will affect small businesses as well and administration will be extremely difficult.

She said that the special commodity levy will have an impact on the cost of imports and do we have the infrastructure and the capacity to produce them locally, she said.

SG