Govt.’s new tax policy unfair and regressive: SJB

By Darshana Abayasinghe

• Govt. did not consider practical alternatives for income tax
• Corrupt elements getting away, whilst people must pay
• Treasury coffers empty; questions how Govt. plans to collect revenue

The main Opposition Samagai Jana Balawegaya (SJB) said yesterday the public has been burdened with unfair taxes as the Government did not consider workable alternatives, and it still has no sustainable plan to boost rupee income.

SJB MP and economist Dr. Harsha De Silva said the Parliamentary Committee on Public Finances had recommended to Government to follow the Indian model for personal incomes tax, which would have yielded just Rs. 7 billion less than the current projection.

“But what is the real projection? At times the Government says it will earn Rs. 70 billion from the new personal income taxes, and then again it says it will earn Rs. 100 billion? The Treasury has no dollars or rupees? How will Government meet its expenses? We cannot print money, as the IMF bailout agreement explicitly states we cannot print more money,” De Silva stated.

With the new personal income tax policy rolled out this week, employees across public and private institutions felt the pinch of the increased taxes. The SJB MP expressed hope the same policy is applicable to all ministers and officials appointed by politicians.

He said the Parliamentary Committee on Public Finance has directed the Commissioner General of Inland Revenue to submit a report early next month on new earnings and the processes adopted with the new personal income tax policy.

“We cannot print any more money; one is because of the IMF conditions and also it will lead to inflation. We warned the Government this would happen, but that fell on deaf ears..

 Today (yesterday) was the largest issue of Government Treasury Bills, and it would be interesting to see how the market will respond to the issue, what rate of interest will be demanded and how the Government would respond if it cannot raise the required finances,” he added.

De Silva said taxes are required but they must be fair. He pointed to State Minister Ranjith Siyamabalapitiya, who had stated the sugar scam had cost the Government Rs. 25 billion in revenue. The SJB MP questioned why the Government does not recover these funds from individuals who have been found evading tax.

“Income taxes should be fair and representative. We the SJB have demonstrated they can be fairer. In the next SJB Government, we will ensure that personal income tax will be made fairer and representative. We can do it and we have a plan for it, which we have shown,” de Silva said.