26 October, 2020

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Ranil’s Tax Bombshell

Sri Lankans were in for a rude shock this afternoon, after Prime Minister Ranil Wickremesinghe announced proposed tax amendments in Parliament today, as his government looked at new ways to generate income amidst economic instability.

RanilAccording to the proposed amendments, the Value Added Tax will increase to 15%, while the Nation Building Tax will remain unchanged at 2%.

However, Wickremesinghe assured that the increased VAT will not be imposed on essential commodities and electricity tariffs. Wickremesinghe added that tax concessions granted on telecommunication services, private education and health services would be removed.

Meanwhile, the government will also be reintroducing the Capital Gain Tax. ( By Munza Mushtaq © Colombo Telegraph )

Full speech can be read here

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Latest comments

  • 9
    2

    Knowing well that people are burdened with financial hardships, it is ridiculous to increase taxes. Mistakes are not done by the people but the parliamentarians. If there had been a robbery within the parliament, then best option would be to tax the parliamentarians for negligence. Why not all the parliamentarians declare their assets, to the elections commissioner, certified by the CID and Auditor General and explain how they earned them. Impose income tax on all MP’s.Cut down all unnecessary privileges allowances and expenses enjoyed by them & Start charging for meals provided in the Parliamentary canteen. Reduce the number of Ministers and Deputies. Introduce wealth tax, tax vehicles used by/for private companies.

    If such measures cannot be followed, the present government is cheating & robbing the ordinary people in violation of the normal laws.

  • 6
    1

    SL does not have coherent tax system and even collecting suppose to be taxes also not working due to lack of proper systems and checks..

    You should start with council rates that come from buildings and when I enquire about colombo 7 rates that got million dollar property, I got a rude shock. They are less than 1000 RS.

    How the hell you have a clean country and roads with that kind of a rort?

    Each govt. from UNP and SLFP was not qualified to run the country let along run a proper fiscal policy.

    Poor house maid’s foreign income is spend on politico luxuaries which has never ending money allocation.

    Guys, we need a Russian or French type revolution to erase those crooked morons from this earth.

  • 1
    5

    Someone once suggested that Ranil W. was the only other person capable of running the country after MR.

    I expected RW to take over from MR in 2017, in a presidential election. No matter, he has two years head start.

    Mr. Prime Minister: do whatever has to be done. Raise taxes, but do it properly. I wish you success with recovering the economy since I am in this economy as well. ( I am not living abroad)

    Leave our minister-politicians alone, if you cut their beneficts they will not have an incentive to do what they are doing now!

    One question that puzzles me is how MR planned to destroy the country economically by 2016 and still remain president for the next eight years – or forever.

    Are you familiar with the theory that Monarchs tend to preserve national economic wealth?

    • 0
      0

      [Leave our minister-politicians alone, if you cut their beneficts they will not have an incentive to do what they are doing now!]
      Really? without their benefits no incentives? They will turn up without any pay because this bunch of unprincipled thieves make their fortune by stealing the countries wealth with out blinking a eye lid. And this go for ruling & the opposition so called I use the word loosely politicians.

  • 3
    2

    It looks like some folks do not really know why rates needs to be increased.

    The picture here explains the problem.

    http://www.tradingeconomics.com/united-states/interest-rate

    Observe the tiny bump in the end?

    That signifies the USA federal reserve increasing their interest rates. When USA increased rates there is a flow of currency into USA. That increases the value of USD.

    We live in a globalised economy and that has an impact. When USD goes up so does the LKR in the opposite direction. We need to raise revenue to meet interest rate payment shortfall.

    We are lucky to have a PM whom despite the negative political circumstances is being bold enough to meet the challenge.

    If it was MR he would have borrowed more money to pay back increased interest rates. That is not good for the country overall but he would get a political tick of approval from ignorant masses.

  • 2
    1

    Tax must be for anyone and everyone but for the rich more as it is being done in EUrope.
    Just neglecting these issues have taken us aback all the years.

    Countries funds should be circulated within the country- that is the way of getting the country developed. You cant always rely on the funds offered to you by developed world. Now saying us as midincome earners, so why not pay your taxes accordingly – ALL looters should be brought before the courts regardless of the status of them.

  • 4
    0

    reduce benefits to ministers and parlimentarians, recover the USD billions plundered by the Rajapaksas, remove vehicle permits for parliamentarians stop funding white elephant provincial councils and do not burden overburdened citizens already undergoing great difficulties. while investor forums are being held to attract FDI, we have the PM providing ample reasons not to invest. very disjointed with a supposedly business savy government.

  • 4
    0

    before increasing the taxes the governemnt must eradicate wasteful spending.

    wastefulness of goverenment spending rankings

    srilanka -52nd

    bhutan-15

    canada-23

    china-24

    denmark-37

    HK-14

    indonesia-30

    ireland-32

    japan-22

    jordan 33

    laos-25

    luxembourg-16

    malaysia-8

    netherlands-18

    NZ-5

    norway-13

    singapore-3

    sweden-10

    switz-11

    turkey-38

    UK-34

    estonia-19

    finland-9

    germany-20

    how are all these countries spending their revenues much better than us.To do that you got to look into their budgets etc and see how much we vary from them and then slash those expenditures accordingly.without doing that transferring ones management problem onto the people by increasing their burdens is grossly unfair and contrary to good governance principles.The voters will teach such governments a lesson when the time arrives,every dog will have its day.

    • 0
      0

      At the time Dr. Dahanayake – from Galle was a powerful law maker, he had only a driver. To that time, they did not have luxary jeeps given to law makers.. today, with roads being better, why the politicians to own this much vehicle pools is beyond all bearing.

      Alone the man alleged to have deliberately eaten the people s funds – moves from A to B, how many men is seen their to guard him. I am sure, CBK or other seniors would agree – the vehicles that are offered to them would be reduced to few. Rajapakshe s properites should be taken to the state – having proved all the allegations are truth.
      Now with Courts being given powers to act independetly, verdicts should be welcome by all and sundry.
      I see, Buruwanse moves as a higher minister would do even today – whille Angela merkel uses just one single car with her driver. That is how Europeans work.
      No spaces terrorists to attack these leaders, since the law and order is in place to be acted rigoroously.

  • 2
    0

    Now that general election is over it’s time to ‘recover’ the funds from the citizens. What short memories Sri Lankans have.

  • 0
    0

    RW said a mouthful _”“We will not take loans to settle the loans like the Rajapaksa regime did. We will not be able to solve economic problems in such a manner,” the Premier said. “To get out of this crisis, we should increase the national income. We have to streamline the tax revenue of the government.”-

    Mr.Wickramasinghe, I do hope that you will make this a reality.Since 1977 the govts of the day ( all govts) did not create the necessary infra structure to increase national income rather their action caused the national income to shrink.

    It was the so called foreign investor who killed our sugar industry at badegama which would be about 200years old by now. Passion fruit cordial prodution was becoming a house hold industry and a major source of income for the.Can you buy a hottle of Passionfruit cordial today ? Leave aside buying a bottle of cordial, can you find a passionfruit on sale anywhere? Thanks to a German investor that happened.

    Dear Mr RW will you take the necessary step to save the undermentioned expense, which JRJ promised but did nothing. So did JRJ’s successors.( 1977 – 2015)

    “The Central Bank of Sri Lanka(1) report that during the years 2005 – 2014 the cost to the country to import Crude oil, Refined products, L.P.Gas and Coal had been Rs 4,149,581 Million and the cost in 2014 had been Rs 626,025 Million”

    Waiting to see what action will be taken by your Govt.

  • 0
    0

    RW said a mouthful _”“We will not take loans to settle the loans like the Rajapaksa regime did. We will not be able to solve economic problems in such a manner,” the Premier said. “To get out of this crisis, we should increase the national income. We have to streamline the tax revenue of the government.”-

    Mr.Wickramasinghe, I do hope that you will make this a reality.Since 1977 the govts of the day ( all govts) did not create the necessary infra structure to increase national income rather their action caused the national income to shrink.

    It was the so called foreign investor who killed our sugar industry at badegama which would be about 200years old by now. Passion fruit cordial production was becoming a house hold industry and a major source of income for them.Can you buy a bottle of Passionfruit cordial today ? Leave aside buying a bottle of cordial, can you find a passionfruit on sale anywhere? Thanks to a German investor that happened.

    Dear Mr RW will you take the necessary step to save the undermentioned expense, which JRJ promised but did nothing. So did JRJ’s successors.( 1977 – 2015)

    “The Central Bank of Sri Lanka(1) report that during the years 2005 – 2014 the cost to the country to import Crude oil, Refined products, L.P.Gas and Coal had been Rs 4,149,581 Million and the cost in 2014 had been Rs 626,025 Million”

    Waiting to see what action will be taken by your Govt.

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