Two Budgets for 2010/11:

Simple tax scheme soon

Ramani Kangaraarachchi and Indunil Hewage

The Government will soon formulate a simple tax procedure, which will address loopholes in the existing tax structure. Deputy Finance Minister and Senior Presidential Advisor Dr Sarath Amunugama will chair a committee which will look at all rules and regulations and formulate a simple tax procedure closing all loopholes in the existing system.

The Government mainly gets its revenue from the Inland Revenue, Customs Department and the Excise Department. “But it is regrettable to note that the Government is not getting its revenue even though taxpayers pay their taxes due to loopholes in the tax system. Strong measures should be initiated to prevent the leakage,” Dr Amunugama said.

Sri Lanka can look forward to a period of growth due to emerging opportunities and the positive environment locally and globally.

Deputy Finance Minister Sarath Amunugama told Daily News Business that the main reason is that there is no economic cost on the war and there is no uncertainty in the country,” he said. With these changes there is a good opportunity to restart the economy.

The Deputy Minister said the Government will have two budgets for 2011, one around June and the other budget will be presented to Parliament in November.

He said the 2010/2011 budget will incorporate many of the proposals in the Mahinda Chintana.

Increasing Government’s revenue and decreasing unnecessary expenditure in the country would cover the budget deficit in the country. Sri Lanka is also considered as a fine tourism destination. Many investors are willing to invest in the tourism sector, especially in the areas in Trincomalee and Arugam bay. There is a significant increase in arrivals of Indian and Chinese tourists to Sri Lanka.

He said that the global economy is recovering, exports picking up, foreign remittances are increasing, the stock market doing well and the tourism industry is expected to improve as competitive markets such as Thailand, Maldives and Bali facing various difficulties. Sri Lanka can improve immensely on these grounds if right plans can be implemented.

With the end of terrorism, the Northern and Eastern parts of the country are reviving. There has been a significant growth in the fisheries, paddy cultivation, and tourism sectors in these areas. These areas can be converted into a powerhouse of country’s economy, if the Government has its policies well.

The country must be positioned towards knowledge economy and develop IT and nano technology. A radical transformation in education is necessary to explore the potential of educated unemployed youth.

The SME sector has to be upgraded adding value to the economy. They are not getting sufficient stimulus and the country is losing both ways. These dark areas have to be addressed to create wealth, the Deputy Minister said.