Dailymirro rounds up comments and detail on the Mansion Tax mentioned in the mini budget presented on Thursday.
The new government’s Robin Hood budget presented on January 29 has attracted much attention, mostly positive, for being one of the budgets to relieve people of the burden of the high cost of living.
However, the interim budget has been very unforgiving on casinos, sports channels (one in particular) and the super-rich of the country.
In the budget, a proposal that caused a controversy was the mansion tax, at the time which was Rs. 1 million per annum tax on houses over 5,000 sqft or valued at more than Rs. 100 million.
While many panicked and rushed to measure their houses, the government has been quick to assure that it will be revised to exclude inherited houses and only include those that have been built in the past 10 years.
The spoke to several parties who were involved in the introduction of the tax as well as other analysts to determine how the tax would be imposed and who would be affected.
“Only 0.01 per cent of the population will be affected by the mansion tax” – Ravi Karunanayake
Finance Minister Ravi Karunanayake, the person behind introducing the mansion tax, had this to say:
“We are not looking to tax ordinary houses but a few houses that are genuine mansions. These are the super-rich houses that are not paying a single cent to the country in terms of tax,” he said.
He said that the government would not tax houses that have been inherited or those that have been in families for generations.
“We won’t be taxing old houses, only those mansions that have come up in the last 10 years, those whose wealth has been amassed in a very short period of time.”
The Finance Minister added that nobody needed to panic as it only affect about 1,000 houses in the country and the tax will be imposed on only 0.01 percent in the country.
“Nobody needs to panic as we are not trying to tax people on their hard-earned money. This tax won’t affect 99.9 percent in the country. It is not a punitive tax. It is very clear that normal houses will not be coming under this tax; it is only those extraordinarily massive houses that will be taxed.
“Houses that have been converted into commercial establishments are paying their due taxes will not be coming under this tax. It is not a witch hunt. We will look at this realistically. Only about 1,000 houses in the entire country that are genuinely mansions and belong to those who can afford to and should pay taxes will be taxed under this proposal.”
Mr. Karunanayake also said that even though his own house did not fall into this category of newly built mansions, he would be paying the tax.
“Even though my house doesn’t come under this category of houses, I will be paying the tax because I am the one who introduced this tax. The JVP or anyone else don’t have to tell me what to do,” he added.
“We will make fair adjustments to the mansion tax” – Dr. Harsha De Silva
The Deputy Minister of Policy Planning and Economic Affairs, Dr. Harsha De Silva said that the implementation criteria has not yet been finalised.
“We have not determined the criteria to implement the mansion tax yet. But we can assure that no one needs to panic as we are not applying this tax on inherited houses. We will take all views into consideration and make fair adjustments as necessary,” he said.
“Our policy is that the rich should pay taxes” – Champika Ranawaka
Minister of Power and Energy Patali Champika Ranawaka said that the mansion tax was only one aspect of the general economic and taxation policy of the new government.
“We saw the last government taxing the ordinary people, the middle and the low income classes, on essential goods and services. They imposed taxes on rice, flour, milk powder, sprats, fuel and basic needs of the people,” he explained.
“This government’s economic policy is to relieve the poor and tax the rich. That is how it should be.
“Even in principle, those who should pay taxes are those who can afford to– not the poor. That is why we have imposed taxes on casinos and other large-scale businesses. The Mansion Tax is part of this general policy,” the Minister added.
Mancini More info on this tax needed. One million per annum or?? Either way, One million is a ridiculously high amount to pay.
Dan You all opted for a change and now it is coming your ways thick and fast....
Nims Mate, There is nothing wrong in this. How many in Sri Lankans can afford to have a house worth over 100 million?
Shameer If you could build a house worth more than 100mn you should be able to absorb this.... or live in a small house.
Kumudu If the house is built by foreign employment. It is taxable or not? We foreign employment people have to think what alternative saving methods.
Kolonnawa kola It is if the house worth more than 100 million only, 1 million is not a big money for you, if you can build a house at the cost 1000 million. It would be a heavy luxury house.
Sataro Who is going to value the mansions?
Dcn Still it is not clear the norms that would be applied in defining mansion’s age. We are sure the FM would pay these taxes if he is liable for same and he should inform the public when he makes the payment to give confidence to them on good governance
Sunil This is totally absurd. More thought should go in to this without haphazardly doing things that comes in to one man’s mind. Are you going to replace d previous govt. mentality? We spent our whole life and put in our life savings, took loans just for a little comfort before our death to have something we missed.
Now we are retired or about to retire. We could lose our jobs. No earnings. How are we going to pay such amounts. Where are we going to get so much money to pay such amounts annually?
Dev Ravi K. is going to be responsible for the former regime being voted back in at the next general election due to his extortion policies.
Akn Do not look at rich people as thieves. If they had not paid taxes, then implement robust procedures to ensure rich people are taxed accordingly. Hate and anger should not be the base for policy making.
Nadik A wealth tax / mansion tax is a good idea and true patriots should have no qualms about paying. However, the new government should not appear amateur by proposing and then backtracking.
Richard It is a good move by the govt. In addition they should also impose another tax for people who have more than one car as our roads are already clogged up with too many vehicles.