Strong fiscal policy framework in place
TREASURY SECRETARY: Dr. P. B. Jayasundera. Picture by Sumanachandra
FISCAL POLICY: The Government is now in the process of
formulating a strong fiscal policy framework to convert the revenue
account into a surplus as against the country‚Äôs day-to-day expenses,
within the next three to four years, Treasury-Secretary, Dr. P. B.
‚ÄúOur revenue account in the budget during the last 30 years was above
day-to-day expenses. It has been the legacy or salient characteristic
for some time,‚ÄĚ Dr. Jayasundera said at a taxation seminar organised by
the Sri Lanka Institute of Taxation.
Dr. Jayasundera making the keynote address said to face this
challenge it is necessary for the country to reach sustainable revenue
growth and create an investor-friendly environment in the country. Up to
1990, the country was able to manage revenue as equivalent to the
country‚Äôs GDP enabling Sri Lanka‚Äôs per capita income to reach US$ 400.
From 1990 to 2004 despite all difficulties our country became a
middle-income category country by reaching the per capita income of US $
1500, he said.
The Treasury Secretary also said the Government is now planning to
achieve a 19 per cent revenue growth in the next one to two years in
relation to the GDP.
To achieve it, the country has to move in the proper direction to
increase revenue that comes from taxation, he said. Dr. Jayasundera said
the country‚Äôs revenue account could be increased by conceptualising
strategies by reducing recurrent cost, building a human resource
capacity in organisations and adopting appropriate legislation.
He said that salaries paid to public servants, interest for past debt
taken from other lending agencies and subsidiary payment are three areas
that should be evaluated properly to streamline tax collection in the
country to streamline revenue collection.
‚ÄúThe country has to remove unhealthy and useless subsidy payments to
strengthen the revenue level in the country. Over the last few years
flour subsidy was removed after 50 years and also the petroleum subsidy
also removed to a greater extent to improve taxation,‚ÄĚ he said.
He further said the public service should be given reasonable
Areas like education, health cannot be stopped from subsidy, while
Sri Lanka Customs, Department of Exercise have to be strengthened to
cover loopholes and deficiencies when collecting revenue to the country,
Further, the Inland Revenue Department should also be strengthened
and modernised to address taxation issues in the country, he said.