Finance State Minister Ranjith Siyambalapitiya said new taxes had to be imposed to provide relief to 3.8 million low-income families in the country. According to the State Minister, out of 5.8 million families living in the country, 3.8 million families or 60 per cent are expecting some relief from the government.
He said that Sri Lanka is one of the countries with the lowest tax revenue in the world. The total tax revenue is 8.3 percent of the country’s Gross Domestic Product (GDP). The cost of the country is 20 percent compared to the GDP.
This includes expenses such as government employee salaries, health services, education services, pensions, providing marine subsidy.
The State Minister said that money cannot be printed when inflation is at 60 per cent level and said the next step that the government can take is to increase the tax revenue. Income tax is levied on those earning more than Rs.100,000. For instance, a person with an income of Rs.150,000 will be charged a tax of Rs.3,000 only.
Only 2.8 percent of the 4.8 million government, semi-government and private sector employees are earning more than Rs.100,000.
“The government has to make the people of the country live. For that, it has to take unpopular decisions. Tax revenue helps for that,” State Minister Siyambalapitiya said.
He said the government expects an income of Rs.100 billion from the tax.