Moving away from the years-long tradition of not taxing the President, the current Inland Revenue Bill now paves the way for the President of Sri Lanka to be taxed, Finance Minister Mangala Samaraweera told Parliament last week.
This was stated by the Minister before the passing of the new Inland Revenue Bill while responding to a query by MP Anura Kumara Dissanayake of the Janatha Vimukthi Peramuna.
The Minister was quoted as saying that the provision exempting the country’s president from income tax in the draft bill was removed at the request of President Maithripala Sirisena.
The President will have to pay income tax under the new law breaking away from the tradition which emanated from the tradition of not taxing the Queen, under British rule. Deputy Minister of Policy Planning and Economic Development, Dr. Harsha de Silva says that the new provision is all about the government wanting to do what is right by the people.
“Under the new law when every citizen is to be taxed, why should only the President be exempt from it?,” he queried, adding that it is highly commendable that President Sirisena himself had requested the existing tax exemption to be removed. However, political parties continue to have mixed views regarding the passed Bill and have expressed concern regarding the implementation of the tax in relation to the Head of State.
JVP Parliamentarian Vijitha Herath told the Sunday Observer that no such provision was included in the initial Bill presented to Parliament.
“It was only when we questioned as to why the President has been exempted from paying income tax that the Minister made a hurried statement declaring that the President will be required to pay income tax,” he said, adding that the draft had only earlier included that the Prime Minister, Ministers and Parliamentarians are to be subjected to taxation.
According to the MP, only a few amendments requested by them such as regarding the removal of tax on the EPF fund were included while many others were disregarded. Expressing his displeasure, the MP said the new law is placing a greater burden on the public by taxing them separately according to their assets and savings.
“Every citizen has been further entrapped by the new law,” he said.
Meanwhile expressing his views on the change, Joint Opposition MP Dinesh Gunawardena, questioned if the tax on the President’s income will be properly enforced. “Everyone should be taxed and we are favourable to the amendment made,” he said adding that, however, it has to be seen how it will be practically implemented.
However, according to de Silva, the Opposition need not have doubts regarding its implementation.
“As this was done at the request of the President, there is no question or doubt regarding it being strictly enforced,¨ he stressed, adding that in future the President will pay taxes on his income. Gunawardene also said that to ensure a growing economy, it is important to give tax exemptions to industries with the potential to generate revenue.
According to Gunawardena, the government also needs to look into obtaining further revenue from the departments of Customs and Excise.
“We must decide if we are going to create an economy that will create a stark divide between higher and lower income earners or one where the majority will be able to enjoy good income levels,” he said.
“Policies cannot change and need to be stable” he stressed.