New direct taxes soon targeting rich
Sri Lanka’s cash-strapped government has announced a taxation overhaul to boost revenue amid the country’s crippling economic crisis, hiking value added taxes and corporate income tax, and slashing the relief given to individual taxpayers.
The Government is now striving to introduce more direct taxes on par with international practices with the aim of increasing tax revenue at least by 15 per cent, Minister of State for Finance Ranjith Siyambalapitiya told the Business Times.
He added that the percentage of direct tax should be increased by 15 per cent to 35 per cent in the short term from the present rate of 20 per cent.
The Finance Ministry is working on this subject at present to introduce some direct taxes soon before or at the presentation of the upcoming 2023 budget, he revealed. Minister Siyambalapitiya was of the view that at present the rich and poor are paying the same amount of tax for goods and services and this should be changed even to some extent.
The short term solution would be the introduction of more direct taxes catching the rich in to the tax net, he pointed out.
The Finance Ministry’s budget department is exploring the possibility of introducing the wealth tax which was in the pipeline for several years, new super gain tax, new capital gain tax modified surcharge tax and several other novel direct taxes.
Considering complaints and appeals of small and medium scale enterprises and entrepreneurs, State Minister Siyambalapitiya has appealed to heads of state banks to provide some relief when recovering their loans or granting new loans under the present high interest rate regime while protecting the banks’ liquidity positions.
He made this request at a recent meeting of heads of state banks, senior Treasury and other officials.
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