Wednesday Nov 06, 2024
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Wednesday Nov 06, 2024
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State Finance Minister Ranjith Siambalapitiya
State Finance Minister Ranjith Siambalapitiya said the Government is working to change the tax structure and increase the number of tax files to one million by the end of the year, whilst bringing those absconding into the tax net to change the collection ratio between indirect and direct taxes from 80:20 to 60:40.
“Just as the people must pay taxes, the Government will assure spending tax money in a responsible and effective way,” he said during the debate to ratify the provisions under the Appropriation Bill in Parliament yesterday.
In 2022, the per capita income was at $ 3,268, he said, adding that only 205,000 tax files were available.
“It is clear that a large number of people who can pay taxes have evaded tax payments. If calculated according to per capita income, the number of tax files in this country should be at the level of one million,” he pointed out.
However, from 1 June Government made it mandatory for professionals in 14 fields to pay taxes.
Siyambalapitiya also noted that a tax file will be opened for all those who have completed the age of 18 from 2024.
“The Inland Revenue Department will set up a separate unit to process information on new taxpayers. This is to ensure the convenience of new taxpayers,” he added.
Noting that the Government is working to eliminate the fear of taxes, Siyambalapitiya said that parties opening new tax files should disclose their income and expenses only in relation to the year 2022/23. He assured that information about historical income will not be considered for this purpose.
Siyambalapitiya also said he is and he added that he is ready to forward a proposal to the President to make it mandatory to maintain tax files and asset declarations to accept nominations for individuals wanting to enter politics.
Earlier this week he said opening a tax file will be made mandatory for all politicians and ministerial staff.
“The total tax revenue in 2022 was shown as Rs. 1,979 billion. Under the existing 80:20 tax ratio, nearly Rs. 1,600 billion were included in indirect taxes paid by the people and only Rs. 400 billion were generated as direct taxes paid by taxable parties,” he disclosed.
Pointing out that the tax composition of indirect and direct taxes has changed to 70:30 in the past five months, the State Minister said the Government expects to change the tax ratio to 60:40 by the end of the year.
