CBSL Governor upbeat about being on right track, but urges govt. to do more to protect low-incom...
The government should do more to protect low-income earners, the Governor of the Central Bank, Dr. Nandalal Weerasinghe said on Thursday (21) during a televised interview.
He said that during the economic crisis and due to high inflation, a lot of people in the SME sector lost their jobs.
“Who were the worst affected people in the country? The poor. In this kind of situation, the government has to look after them. The ability of the government to help through programmes like Aswesuma comes from its tax revenue. This is why tax policy is important,” he said.
He also said the tax net should be expanded to include everyone who can pay taxes.This money can be used on people that need help. He said there should not be any tax exemption to any industrial sector.
“Tax policy has to be fair and broad-based. Everyone should pay the 18 percent VAT, except the exporters. When it comes to personal tax, high income earners must pay more. We have an 8.5 million labour force in this country. All taxpayers are less than half a million people,” he said.
There should also be strong institutional reforms to strengthen tax collection, he added.
Dr. Weerasinghe said the current tax rates are high, but the tax collection is still not sufficient. If the tax burden is shared by everyone, the taxes can be brought down, he said.
“Tax evasion is a serious issue in this country. Some people pay high taxes, while others evade taxes. We need strong institutional reforms. Inland Revenue, Customs need to be strengthened. Digitalisation and information availability are essential for this,” he said.
People should do fewer transactions using cash and businesses should not be keeping two books, he said.
“A lot of businesses keep two books. One for taxes and the other for their operational use. Tax authorities should be able to catch these people.”The Governor said the country is on the right track and the economic recovery process has begun.
