Simple and low tax regime welcome - KPMG

Sanjeevi JAYASURIYA

The tax landscape in the country is changing and the budget proposals further consolidated the significant tax reforms introduced last year.

The consistency of policies will enable tax administration as well as tax compliance much easy, KPMG Ford, Rhodes, Thornton and Company Partner and Tax and Regulatory Head Premila Perera said.

Tax proposals should be looked into in the light of the past budget. Going forward on the introduction of proposals for tax reforms and rationalization of dual regime, the current proposals have not deviated from the simple and low tax regime concept, she said at a presentation on fiscal proposals 2012, organized by KPMG on Tuesday.

Emphasizing the importance of a consistent policy mechanism, Perera said tax amendments are dealt in such a way that simplicity is in anyway not undermined. Though concessionary taxes for many sectors including healthcare were introduced, the harmonization of import levies could not be seen among the proposals. It is necessary to have more clarity in the investment framework to expedite investment flow to the country, she said. The tax revenue to GDP which stood at 13 to 13.5 percent in the recent past was targeted to be increased up to 17 percent. However, there are internal and external factors that challenge the achievement of this ambitious growth target. The environment is subject to change and change is inevitable. We need change in a progressive country where change is constant and within the process of the fiscal policy. Policies should not made as quick fix or short-term, to build investor confidence and tax payer compliance to broaden the tax base, Perera said.