Come out with better scientific approach for tax reform - OPA President

The government must come out with a better scientific approach when introducing tax reform, President of the Organization of Professional Associations of Sri Lanka (OPA) Dulitha Perera said.

He said that the current tax proposals have a lot of negative impacts specially for the SME sector and unfortunately the people who earn less are taxed more while people who earn more are less taxed. “We see a mismatch and request the government to review the tariff in a more practical and scientific manner.”

Perera said that the taxable income from Rs. 350,000 has been lowered to Rs. 100,000 and this should be increased to a higher ceiling. (eg. like Rs. 200,000).

He opined that the corporate sector and people must also be assured that there is better return form the government towards its obligations to the people when paying these revised taxes.

“All utility bills like electricity, water telephone ect, have been increased and on top of these expenses a ‘higher tax burden’ on the public when there is also a high inflation this may not be the right time to increase taxes as may be unbearable for some of the taxpayers.”

He also added that the new tax structure will also have a negative impact on SME, export sector, FDI and will also lead to an increase of brain drain, especially among the youth.

“Despite paying high taxes in the future people are still not assured of uninterrupted power supply, better transport system and a corruption free society and many such similar benefits that other countries offer for high tax paying public.” Perera said that the multi nationals will also now try to take their profits out in nemours ways depriving expected tax income to Sri Lanka. The OPA one month ago wrote to the Sri Lanka Representative of the International Monetary Fund seeking a discussion with them to point out some of the negative factors of the proposed tax structure but to date they have not received a reply for their discussion.

“However, the OPA opined that the government needs revenue and a new tax structure should be introduced but it should be done in a more practical manner by taking more from the people/sectors who earn more.