Economic crisis looms large
By Umesh Moramudali and Rathindra Kuruwita-2016-04-27
In late 2015, presenting his economic strategy in Parliament, Prime Minister Ranil Wickremesinghe said the indirect and direct tax revenue ratio in the country will be adjusted to 60-40 by 2020, currently the ratio is 80-20. This was to be done by bringing at least 60 per cent of the affluent class who were not paying taxes under the tax net.
However, those who had been keeping tabs on Wickremesinghe's economic outlook and his policies felt that the UNP leader was just playing lip service regarding the changes to the tax structure. He was compelled to say this due to the populist economic proposals made during the campaign to bring Maithripala Sirisena into power.
The UNFGG Government led by Wickremesinghe considers itself to be 'business friendly,' which translates into lower taxes for the rich. Any effort in the opening phase of the 100-day government to tax the rich and the corporate sector, through the interim budget of January 2015 were done half-heartedly.
The UNFGG Government led by Wickremesinghe considers itself to be 'business friendly,' which translates into lower taxes for the rich. Any effort in the opening phase of the 100-day government to tax the rich and the corporate sector, through the interim budget of January 2015 were done half-heartedly.
Direct taxes
Given below is a list of direct taxes proposed by the 29 January 2015 interim budget, but were not implemented.
1. Super gain tax – any company of which the profit exceeded Rs 2,000 million – tax amount worth 25 per cent off its profit will be charged.
2. Rs 1,000 million tax imposed on television stations dedicated to sports.
3. One time tax of Rs 250 million to be paid by mobile phone operators.
4. One time tax of Rs 250 million to be paid by telecommunication providers.
5. Casino business-owners to pay
Rs 1,000 million as a tax – first payment to be made before April.
6. Vehicle assembly plants have neglected their income tax payments during the previous regime. Rs 120,000 million revenue expected through prompt payments.
Given below is a list of direct taxes proposed by the 29 January 2015 interim budget, but were not implemented.
1. Super gain tax – any company of which the profit exceeded Rs 2,000 million – tax amount worth 25 per cent off its profit will be charged.
2. Rs 1,000 million tax imposed on television stations dedicated to sports.
3. One time tax of Rs 250 million to be paid by mobile phone operators.
4. One time tax of Rs 250 million to be paid by telecommunication providers.
5. Casino business-owners to pay
Rs 1,000 million as a tax – first payment to be made before April.
6. Vehicle assembly plants have neglected their income tax payments during the previous regime. Rs 120,000 million revenue expected through prompt payments.
