'Govt maintaining balance between tax generation and concessions'

Uditha KUMARASINGHE and Irangika RANGE

Finance and State Revenue Minister Ranjith Siyambalapitiya told Parliament yesterday that the Government has been able to successfully maintain the optimum balance between the generation of tax revenue and the provision of tax concessions for the country's development and the uplift of the people.

The Minister introducing seven Bills for the amendment of tax and financial regulations to implement the relief pledged in the budget and the economic stimulus package said the various tax concessions introduced through these Bills have clearly shown that the Government is well aware of the right ratio between tax revenue and tax concessions.

The Minister said the amendments introduced by these seven Bills are aimed at providing more tax concessions while utilising the tax system for the country's economic development.

"It is obvious that the Government has to collect revenue through the imposition of various taxes to cater to the basic needs of the people such as education and health. In addition, the Government has to collect funds to provide various subsidies to the people and implement its development projects," he said. The Government has taken measures to promote local industries and industrialists through the provision of various tax concessions.

The Government has removed the tax imposed on the locally manufactured machinery used for the tea industry and identified by the Sri Lanka Tea Board as tea machinery. In order to encourage those engaged in the jewellery industry, all locally manufactured jewellery has been exempted from VAT.

Various incentives have also been given to promote the local brass industry.Meanwhile, community development projects such as, Gama Neguma, Maga Neguma and Samurdhi projects have also been excluded from VAT, he said.

As a significant feature these Bills have also granted tax concessions to those who bring foreign exchange to Sri Lanka. The interest gained by the sovereign bonds invested in the Sri Lankan Government and the income earned through the tea packaging industry for export have been declared tax free.