July 11, Colombo: Sri Lanka's new Inland Revenue Act will broad base and simplify the tax system for an investor friendly atmosphere, the island's Minister of Finance and Media Mangala Samaraweera says.
During a discussion with representatives of the trade unions of the Inland Revenue Department (IRD) Finance Minister Mangala Samaraweera stated that the main objective of the new Inland Revenue Bill was to simplify the tax system in the country in order to create an investor friendly environment that will attract more foreign direct investments in the near future.
Minister Samaraweera met representatives of the trade unions of the Inland Revenue Department at the Ministry of Finance on Monday (10), and held discussions on matters relating to functional activities that come under the purview of the IRD.
The Minister said that the present tax system in place is complicated and that investors find it difficult to understand. Therefore, he said that the new Inland Revenue Bill will broad-base the tax system and incorporate globally accepted new tax principles to deal with international cross border relations.
The Minister invited the employees of the IRD to submit their proposals and to discuss any other issues regarding the new Inland Revenue Act. Minister Samaraweera further stated that he was prepared to consider the trade union's concerns in order to enhance the tax revenue of the Government.
The trade union representatives briefed Minister Samaraweera on certain administrative and technical issues in the department. The representatives cited the lack of local and foreign training opportunities for officers of the Inland Revenue Department and apprised the Minister on issues faced by them with regard to the payment of incentives. They also stressed on the need for a new building for the Head Office of the Department of Inland Revenue.
Although tax revenue has decreased since 2011, the Government has been able to increase national revenue via increased tax collection to reach an all-time high in the recent past due to new policies adopted by the Government.
The investment advice service, Moody's has welcomed the New Inland Revenue Act gazetted by the Sri Lankan government, stating it would contribute to improving government revenues.
"Sri Lanka's current Inland Revenue Act is a complicated tax scheme that hinders the transparency of taxed for potential investors in fixed and financial assets, limits the effectiveness of local tax officials' supervision efforts, and contributes to a very low tax-to-GDP ratio, in particular the current Act does not efficiently deal with modern business structures and commercial transactions, including cross-border transactions," Moody's said in a statement last month.
Deputy Secretaries to the Treasury, Ms. G.D.C. Ekanayake and Mr. S.R. Attygalle, Director General of Fiscal Policy Mr. A.K Senevirathne, Director General of the Inland Revenue Department Mr. Ivan Dissanayake along with officials from the Ministry of Finance and the Inland Revenue Department were also present.