Govt. expects more from income tax revenue - Dr. P.B. Jayasundara

BY ANJANA Samarasinghe

THE Government is expecting that income tax revenue will contribute 2.8% to the country's GDP in 2006.

Delivering the key note address Treasury Secretary Dr. P.B Jayasundara told a seminar on the Budget organised by The Institute of Chartered Accountants that in 2005 income taxes contributed 2.4% to the GDP and it was 2% last year.

Excise duty is not strong in contributing to the GDP and this contribution should be stable. Excise duty from cigarettes and liquor contributed 2.4% to the GDP in 2004 and is the same as the income tax contribution, he said.

Cess has contributed 2.3% and Customs duty recorded 2.4% this year. It is expected that customs duty will contribute more to the national GDP next year due to the installation of latest scanning machines in the next few months.

There should be a radical change in Department of Inland Revenue, which can create a taxpayer friendly environment, and tax collection should be fast and efficient, Dr. Jayasundera said.

The newly introduced budget has given priority for poverty alleviation.

These poverty alleviation programmes are organised in a cost effective manner.

The budget has also created many opportunities for the rural community to enter the international market and development of infrastructure, Jayasundara said.

The migrant workforce contributes US$ 1.7 billion to the national economy. Most of them are unskilled. If we could transform this unskilled workforce to a skilled force, the country can double the total earnings through this sector, he said.

Advisor to the President on Economic Affairs and Secretary to the Ministry of Plan Implementation Ajith Nivard Cabraal said there are so many viable ways rather than privatisation.

Privatisation is one and the Government will not choose that option. It will adopt good managing practices to prevent privatisation.

"Assistance of the private sector is needed the implementation of budget proposals. Many professional associations have pledged to support in its implementation. Most of the time, implementation takes a long-time, due to delays of certain authorities", he said.

'We need to make taxation more simple and attract more taxpayers to the tax net', Cabraal said.

President of Ceylon Chamber of Commerce Deva Rodrigo said Sri Lanka needs 39% of contribution to the GDP from investments to achieve an 8% growth. Sri Lanka needs to create investor-friendly environment to attract more foreign investors.