Sri Lanka’s tax policy framework to be re-engineered
View(s):The government will be continuing the measures to re-engineer Sri Lanka’s tax policy framework aimed at creating a simple, transparent and efficient tax system that will promote self-compliance and easy tax administration in the 2021 budget after regulating necessary amendments and statutes within the next two months
All taxes under the reforms introduced by the present regime such as changes to Income Tax, Value-Added Tax, Nation Building Tax, Debt Repayment Levy (DRL), Economic Service Charge, Port and Airport Development Levy will be regularised with retrospective effect by presenting and passing necessary amendment bills in Parliament soon, a senior Treasury official told the Business Times
32 notifications and circulars relating to tax revisions have been issued by the Finance Ministry and Inland Revenue Department which are being administratively implemented.
However those tax reform proposals have not been passed into law as yet. In addition to the 32 notifications, there are five tax bills (i.e. VAT, NBT, ESC, Finance Act, and PAL) that have been published but are still pending legislation.
The Income Tax Bill is yet to be issued and enacted in Parliament, he disclosed adding that the government will continue these new tax reforms in 2021 budget as well.
These policy measures will be implemented within a coherent policy framework, consistent with other key reform priorities with regard to public expenditure management, state enterprises improvements and simplification of administrative systems and procedures to provide quality governance.
More incentives will be provided for tourism, IT and enabling services, construction and property market, exports and rural agriculture and overseas employment earnings for professionals are expected to drive the economy with price stability, he added.
However the preparation of 2021 budget proposals is at the initial stage and budgetary discussions with relevant ministry officials are now underway
The budget 2021 taxation is aimed to support the poorest groups whose livelihoods have been severely affected by the pandemic reducing indirect taxes.
(BS)