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Good tax management will reduce burden on State coffers - Carter

by Ravi Ladduwahetty

Sri Lanka's tax administration has been weak for the last 20 years and an effective tax administration will reduce the burden on the State coffers, International Monetary Fund's Senior Resident Representative in Colombo Jeremy Carter said.

"Sri Lanka cannot afford to have the minimal tax payments as the people have to pay for their services," he said.

He said that the proposed Revenue Authority would have better cohesion while coordinating the uncoordinated elements. The systems circumvents the possibility of hounding people unnecessarily, he said.

Commenting on the implications of the banking structure in the wake of the Pramuka collapse, Cater said that there are the strengths and the weaknesses following the debacle.

The strength is that the Central Bank is empowered to take action in such instances while the weaknesses include the need for monitoring financial institutions which are weak.

Commenting on the People's Bank and the restructuring process, he said that the People's Bank's situation was much more significant in the light of its assets constitute 25 percent of the banking assets of the country.

On the other hand, the Bank of Ceylon has made good provisions for Non Performing Loans and they are moving towards best practices, he said. "What Sri Lankan financial institutions need to do is to provide better financial services with the margins lower but is difficult to do that now unless the inefficiencies of the banking sector are eliminated," he said.

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