Govt. to follow fair, consistent tax policy without killing the proverbial ‘golden goose’
Posted on December 21st, 2020

Courtesy Adaderana

State Minister for Money, Capital Market & State Enterprise Reforms Ajith Nivard Cabraal stated that the Government intends to follow a fair and a consistent tax policy without killing the proverbial ‘golden goose.’ Speaking exclusively to Indeewari Amuwatte at the ‘@HydePark’ program on Ada Derana 24, the State Minister expressed the following:

The most important thing about revenue is that it must be possible for people to pay because the government revenue is actually your expenditure. If the government is collecting more and more taxes it means the ordinary people of this country have to pay more and more, businesses will have to pay more and more. So, the government has to be conscious of this balance. If you were to deprive the base of the possibility of it to grow, it would be like this proverbial ‘killing of the golden goose that laid the golden eggs.’ What this government has done is to have reasonable tax rates with reasonable percentages being imposed. So that people can still part with the part of their income and not be significantly deprived of their own capacity to invest further.”

“We want to have a tax regime which is fair and which is consistent. We have a consistent policy where people can take investment decisions. That is very vital that people are able to take long term investment decisions, because through those decisions we can activate the economy very easily. At the same time, we expect the taxes to be paid by the people who are doing business in the country. That is why we want to plug all the leakages as well.  If there is a leakage that is occurring, it is the interest of the government to ensure that those leakages are plugged and those are not able to function in the future, so that, whatever is done in Sri Lanka, is a legitimate business which is yielding revenue to the government. With that kind of strategy I think we can ensure that the revenues will be consistent and  government coffers will be improving.”

Speaking further, Cabraal  emphasized on the importance of addressing the revenue losses from illicit industries.

“What you mean by illicit industry is actually smuggling. If they were to pay taxes on the products that they are manufacturing or distributing and if the proper taxes are being paid then that industry will become legitimate. Overall we do recognize that in the case of liquor, tobacco and other items, where the duty element is there, the government may be losing some revenues and those needs to be addressed.”

When you have income which is not declared there is a great possibility that it can be channeled to other illegal avenues as well. It is in the interest of all to ensure that the proper revenues are collected by the government and that all the avenue of through which revenues are coming into the country are legitimately accounted for. Very often we have seen terrorism financing or money laundering has taken place from monies that have been generated by illegal means. It is fairly a complex problem which needs to be tackled by all parties and at the same time we got to ensure that we come down hard on those who go on these types of activities as well.”

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