Government statistics reveals that the revenue targets set by the government earlier this year have been reduced by nearly half. According to Inland Revenue Department figures, the government’s revenue target of 800 billion rupees at the beginning of the year has accumulated to 362 billion rupees (45.2%) over the first ten months of the year.
An official of the Inland Revenue Department told the media that in addition to the tax reforms that have been in effect since the beginning of this year, the two corona epidemic waves that have hit the island have had a severe detrimental effect on revenue collection.
Opposition MP Dr. Harsha de Silva says the government’s sharp fall in tax revenue was due to an arbitrary decision taken by the government last December before the corona epidemic.
Dr. Harsha de Silva says that this was due to the tax concessions given to businessmen to win the general election.
Regarding the revenue targets, the Inland Revenue Department official said that the government had set a revenue target of 800 billion rupees at the beginning of 2020, but later lowered it to 600 billion rupees and again reduced it to 470 billion rupees.
However, even those revised targets are not being met today, and the government’s revenue targets for this year have fallen further, he said.A senior official of the Inland Revenue Department has told the media that the department has tried to further reduce the revenue target to Rs. 411 billion, but that target will not be achieved by the end of this year.
This year’s revenue decline is most significant because it earned 785 billion rupees, or 98.1%, of the revenue target of 800 billion rupees in 2019. An official with the Inland Revenue Department said there were about 600 high-level taxpayers, including major companies, whose incomes had plummeted due to the epidemic, and that the hotel and banking sectors were severely affected.
“Due to the losses incurred by the companies, the Inland Revenue Department will not be able to collect taxes from them even next year.” He added.
Commenting on the severe erosion of government revenue, Dr. Harsha de Silva points out that despite keeping the budget deficit at 10%, the government has had to raise a trillion rupees to cover its revenue deficit.
He has revealed that the taxes imposed on the people will have to be doubled for that.
“In that case, according to the appropriations bills they have presented for the coming year, it will be a very difficult time for the general public. Because the taxes that this government reduced when it came; VAT was reduced, MBT was abolished, income tax was reduced, but the people did not get relief from them. Which item was cheaper? But on the other hand, incomes have plummeted. How can the government collect a trillion rupees from people who are wondering how to eat at home with their income, ”the former minister asked.