There is ‘certain injustice’ to the people due to the VAT increase from 15 per cent to 18 pc, said former finance minister Ravi Karunanayake.
“Now, IMF representatives are here. VAT has been increased on their instructions. They are saying income and expenditure should be balanced.”
“There is certain injustice in the VAT increase from 15 pc to 18 pc. The three pc increase to earn Rs. 146 billion is for paying the salaries of 1.4 million public sector workers,” he said in reference to the increasing cost of living.
Therefore, Karunanayake said, the productivity of the VAT increase should be reconsidered.
Instead of increasing VAT, what is needed is to create productivity and end wastage, he said.
The IMF should be told to let us decide the way to earn income.
Have no undue fears over TIN
Speaking further, Karunanayake said people should have no undue fears with regard to the mandatory taxpayer identification number (TIN).
Having a TIN does not necessarily mean having to pay tax, he said, adding that only those falling under the taxpaying category will have to pay taxes.
It is a shame that only 18,000 out of 120,000 companies and between 200,000 and 300,000 out of 22 million people pay taxes.
Almost 94 pc will not have to pay after they register for TIN, said Karunanayake.
For 75 years, the country had no professional basis for progress and what is being done now is to take it out of bankruptcy, he added.