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July 31, Colombo: Sri Lanka President Mahinda Rajapaksa has appointed a ten-member Commission on Taxation to study the country's tax system with the goal to assess why the revenue on GDP has declined and devolve proposals to remedy the situation, the Presidential Media Unit said.
The Commission will study various taxes operational at different levels of the government and propose ways and means to nationalize such taxes at national, provincial, and local authority level with the view to maximize revenue objectives at each level.
Sri Lankan government told the International Monetary Fund (IMF) it will take effective actions to reverse the declining trend in tax revenues to bring the fiscal deficit down as a condition to obtain the US$ 2.6 billion loan from the IMF.
In its Letter of Intent the government said it is committed to increasing tax revenue by at least 2 percent of GDP by 2011 with measures to broaden the revenue base, significantly reduce tax exemptions, and further improve tax enforcement.
They will also examine broad problems connected with the implementation of the Value Added Tax (VAT) and the connected refund system.
The Customs Tariff will also be studied by the Commission recognizing international trade agreements and propose necessary changes.
The President has ordered the Commission to cover all areas outlined by him to improve the tax system in the country without placing burdens on the people.
The Commission comprises Prof. W.D. Lakshman, Dr. R.H.S. Samaratunga, Sarath Jayatilleke, Rajan Asirwatham, Nihal Fonseka, B.R.L. Fernando, Dr. Saman Kelagama, Samantha Kumarasinghe, R.P.L. Weerasinghe and K.J. Weerasinghe.
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