MP Dr. Harsha de Silva, the top honcho in the Samagi Jana Balavegaya on matters concerning finances, yesterday told The Island that many professionals from various fields, from the health sector to IT, had written to them seeking their intervention to halt the proposed draconian tax burden on them, especially during these economic hard times. Higher taxes, as much as 36%, is actually contributing to the brain drain of this country, Dr. de Silva said.
As part of the Committee on Public Finance (COPF), Dr. De Silva said they had refused to approve the proposed personal income tax amendment until the Ministry of Finance (MoF) came out with a better alternative/comparative tax scheme.
“When we analyse data given by the MoF, and looking at the Indian tax model, it becomes clear that we can emulate the Indian tax schemes of 5%, 20% and 30% slabs and still generate Rs 62 billion (which is just Rs 6 billion short of what the government expect to raise from the taxes amounting to 6%, 12%, 18%, 24%, 30% and 36%).
“This will certainly give the middle class some breathing space. Moreover, there are numerous ways of meeting the shortfall of Rs. 6 billion. For example, recent data on revenue points out that the Department of Inland Revenue has to collect a massive sum from Casinos that have evaded taxes. Reducing government expenditure in certain non-essential sectors could be another way.
There are alternative ways to gain the expected revenue, while protecting the hard-hit middle class professionals of this country. I urge the government to look at the alternative method proposed by the technical team of the COPF.
