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Regime change led to improvement in Treasury revenue collection: Ravi K

27 May 2015 06:58 am - 0     - {{hitsCtrl.values.hits}}

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The Treasury has collected higher revenues than projected in the January interim budget, despite the opposition still not passing the one-off taxes in parliament, according to the Finance Minister.

“There is about 6-8 percent more than what was budgeted,” Minister Ravi Karunanayake said.

He noted that the increase was due to proper collection of taxes, especially in the Customs and the Excise Departments.

According to Karunanayake, since the change of regime, the Customs Department has continued to accrue over Rs. 2.5 billion daily, compared to Rs.1 billion in the past.

He added that the Excise Department’s value has increased from just Rs.3 billion in November 2014, to Rs.10 billion in April 2015.

“That only happened after we came, so I’m asking; what happened before that? Why did it suddenly jump up in 2 weeks? That’s the basis of a clean government. There’s no corruption or push from the President or the Prime Minister or the Finance Minister, so the entire benefit comes to the Treasury,” he noted.

Meanwhile, Karunanayake said the taxes proposed in the interim budget have not yet been passed to law.

“A minority government is being held hostage by a majority opposition because they’re jealous that they couldn’t pass these before. So they’re basically protecting the casino owners and the super-rich who took advantage of Mahinda Rajapaksa’s government,” he said.

The one-off taxes include a 25 percent tax on profits for companies that made over Rs.2 billion profits in 2013/14, a Rs.250 million tax on mobile phone operators, and a Rs.1 billion tax each on casino licenses, sports channel operators and companies that utilize Sri Lanka’s allocated satellite positions in orbit, to name a few.

The recurring taxes included the annual Rs.1 million mansion tax, doubling of the betting and gaming levy, Rs.200 million monthly tax on alcohol producers etc.

“I’m waiting to see that (mansion tax), because no sooner that it’s in place, I will be the first to pay that tax, even though I don’t need to pay that,” Karunanayake said.

He exuded optimism though he admitted that the setback has caused concern in the revenue side.

“That won’t deter us from going forward and helping the people.  There are 7 more months to go in the year,” he added. Economists have been divided over the interventionary and retrospective taxes, with some saying it disrupts free markets and reduces investor confidence, while others laud them for the opportunity presented to distribute income across the social canvass.
(CW)

 
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