Friday Nov 22, 2024
Friday Nov 22, 2024
Thursday, 8 February 2024 04:52 - - {{hitsCtrl.values.hits}}
Admitting that the Government wasn’t oblivious to the burden on the people, President Ranil Wickremesinghe yesterday promised to reduce taxes.
Presenting the policy statement at the opening of the fifth session of the Ninth Parliament, the President said as Government revenue increases, the Government will take measures to increase benefits for the people accordingly.
“Indeed, VAT poses a burden for many, and we are not oblivious to this fact. We are systematically addressing this issue,” said the President. “Continuing our economic reforms, we aim to alleviate the tax burden as the economy stabilizes. There is also room for a potential revision of the VAT percentage,” he added.
The President told Parliament that in 2022, there were 437,547 registered tax payers, a number that surged to 1,000,029 by the end of 2023, an impressive 130%. “As the tax network expands, the burden on individuals and organisations will diminish,” he added.
In compliance with the on-going IMF program, to boost revenue (by Rs. 1.5 trillion) the Government from 1 January 2024 increased VAT rate by 20% from 15% to 18% and expanded the coverage by bringing a host of essential goods and services and reducing the qualifying threshold.
The move as well an overall regime of higher income taxation has come under fire from the public and Opposition.
The Government managed to boost tax revenue to Rs. 2.7 trillion (9.7% of GDP) in 2023 from Rs. 1.7 trillion in 2022 (7.3% of GDP). Target is to increase tax revenue to 12.1% of GDP in 2024 and 14% next year.
