INSUBCONTINENT EXCLUSIVE:
State Minister for Finance Ranjith Siyambalapitiya emphasized that while Sri Lanka has 01 million individuals with the financial capacity to
remaining 500,000 tax evaders into the tax system, with the goal of decreasing indirect taxes and increasing the direct tax rate, the
He also expressed optimism that the citizens of this country will undergo a positive shift in attitude, thereby fostering development within
the nation.These remarks were revealed by State Minister for Finance, Mr
number of tax files stood at 1,705,233, which decreased to 437,547 by the end of 2022
However, with the new policies of our government, we have successfully increased the number of tax files to 1,002,029 by December 31, 2023
Nevertheless, there is a need for further increase in that figure.Additionally, by the end of last year, the state revenue, which was 8% as
a percentage of the Gross Domestic Product (GDP), has successfully increased to 10%
The government aims to further elevate it to 12% by the end of 2024 and set a target of reaching 15% by the year 2025 to establish a country
with a stable economy.Moreover, amendments have been introduced for Value Added Tax (VAT)
The VAT rate, previously at 15%, has been increased to 18%, and the VAT limit, previously set at Rs
80 million, will now be decreased to Rs.60 million
Since the introduction of the VAT Act in 2001, all goods and services were initially subject to VAT, but subsequent tax amendment acts
gradually exempted certain items
In the latest amendment, 97 out of 138 exempted goods and services have been re-added.The government anticipates that the VAT revision will
contribute an additional 2.07% to the state revenue as a percentage of the general gross domestic product, amounting to Rs.645 billion
The Economic Research Division of the Central Bank has analysed that the increase in tax rates may lead to a 2.5% rise in inflation
However, the Central Bank and the Ministry of Finance express confidence that, with the reduction in the electricity bill, inflation can be
brought back to 5% within two or three months.It is crucial for everyone to bear in mind that we are striving to maintain a 5% inflation
rate in a country currently facing a 70% inflation rate
Despite this challenging situation, the government has worked diligently to increase the salaries and pensions of public service workers,
showcasing the unique aspect of our financial management capabilities.Presently, direct taxes constitute 30%, while indirect taxes make up
Our objective is to shift this balance and raise the direct tax rate to 40%
This adjustment aligns with the conditions of developed countries and promotes social justice
In a population of 01 million capable taxpayers, only 500,000 individuals are currently fulfilling this obligation
Identifying tax evaders and bringing them into the tax net is crucial to reduce indirect taxes.Preparations are underway to implement the
TIN system starting from the February 01
Registration issues are currently being encountered, primarily because this is a new experience for the people
Efforts are being made to address these challenges at the Divisional Secretariat level, with the intention of resolving them through an
It is imperative for the people to embrace this change in attitude for the overall development of the country
