State revenue increases pressure on poor: Eran

The government's efforts to increase state revenue are acceptable, but it should have a good understanding of which tax should be increased and from whom the tax should be collected, Samagi Jana Balawegaya (SJB) MP Eran Wickramaratne said.

While addressing the media, he said that due to the inability of this government, it is not possible to prevent the common people from being under economic pressure.

The office of the Opposition Leader said that the previous government in 2015 was able to increase state revenue, which was 10% of the GDP in 2015, to 13% by 2019. State revenue should be 20% for the country to have sustainable revenue.

“When VAT is increased from 15% to 18%, it will especially affect the low-income earners. This will put more burden on the poor.

“Minister Bandula Gunawardene himself came before the media and said that government revenue has increased by 50% from January to September 2023. Then why is the VAT being increased?" MP Wickramaratne questioned.

“The VAT was increased in order to reach the goals promised to the International Monetary Fund. After the 2019 Presidential election, Minister Gunawardene said that the new government immediately reduced the taxes that the previous government had increased, claiming that the GDP and production in the country would increase. But these tax concessions were to those who helped bring that government into power. He said that a government coming into power and giving a huge reduction in taxes proved that this government does not have the ability to make scientific and rational decisions about governance and financial management,” MP Wickramaratne said.

"At the same time, the direct tax on pay-as-you-earn was also abolished. The NBT tax was abolished, and VAT was reduced from 15% to 8%. Withholding tax on savings interest was also abolished. Debit tax and the capital tax on the return of stock exchange were also removed. As a result, the country's income fell by one-third. It is doubtful that these rulers had the knowledge and intelligence to understand that a government runs on tax income. It is these rulers who not only fell into the abyss by doing this but also completely reversed the country's future course. People need to be mindful of the debacles made by this government.

"The reason for the downfall of today's economy was the ill advice given by shortsighted so-called self-appointed economic experts who had surrounded the rulers who had no experience at all on governance or financial management," MP Wickramaratne added. (Chaturanga Pradeep Samarawickrama)