Wednesday, March 9, 2016
Upping the VAT rate to 15% is a cop out! Where is the widening of the tax base?
It is an insult to the people of Sri Lanka to constantly tax the consumer, and not the earner. Lets face it the big earners can only eat so much and spend so much on frivolous consumables, so their profits, income and hidden loot, all go into increasing their wealth, and that is NOT taxed. I am not really in favor of just taxing people on the wealth they may have legitimately collected after paying their correct amount of Income Taxes, and so they can do what they want to with it.
Will the PM want to pay tax on the house he is living in, even though he may have inherited it, and it is worth about Rs200M which even at a 1% rate would amount to Rs2M a year, and that is more than his annual income! You get the point!
It is the backdoor taxes, whether it is capital gains or wealth taxes that should not be imposed, because our Govt. has singularly over the last 70 years NOT been able to collect income tax that is at stake here.
Of course digitization is the simplest method of catching the culprits, but follow my instructions in an entry a few days ago and voi la you collect all you want!
VAT is a consumption tax, and the middle class are buying Refrigerators, TVs and Washing Machines and that will just add to this tax. The second hand car dealers sell cars for cash, and don’t pay any VAT so they get away with NOT paying any tax on the profit of the car they sold, as the cost is also not recorded anywhere, as cash is paid for it and the whole sordid saga, of Billions of profits made by about 5,000 second hand car dealers goes unreported and untaxed, much to the chagrin of the poorest of the poor, who is paying tax at 40% on the Rs90 kilo of sugar he buys at the corner store.
There is simply something not quite cricket here, and no one seems to complain about how really unfair this is. Where is the JVP on this? Simple they are just too stupid to ask the real questions, and instead only harp on things that are pointless in reality, but which people understand, and don’t have much bearing on the subject concerned.
The treasury MUST bear the brunt of this inability to collect taxes by widening the tax base as even India is able to do a better job than we Sri Lankans and that is a damn shame.
Firstly, what about collecting the TAX on the MPs selling their car permits for Rs27.5M the current going rate for a permit! This is just scandalous.