Sri Lanka accounting body calls for fiscal consolidation

Oct 23, 2015 (LBO) – Sri Lanka’s main accounting body has called for critical fiscal consolidation plan for both the revenue and expenditure sides of the government.

“The government needs reforms in terms of structural changes as well as changes in the revenue and the expenditure sides,” President of CA Sri Lanka, Arjuna Herath said.

Herath was speaking at the 20th annual taxation oration at the Institute of Chartered Accountants Thursday.

“We believe that the current rates of taxation should continue; there should not be any changes. The government is also looking at expanding the tax base and not the tax rates.”

Herath said the institute is proposing a two tier approach for tax rates in Sri Lanka.

“The government should consider to have a two tier tax rate system, one the normal rate and the other for export incentive driven tax rate,”

“We also want NBT and VAT consolidated into one tax for the purpose of extracting the sales based tax.”

President of the accounting body emphasized the need to revamp the expenditure side completely for public finance management.

“We recommended the government to look at accrual accounting. That will allow the government to identify their assets, liabilities and hopefully have a balance sheet that they can monitor,”

“These are some of the messages that we have put forward the government and the government is very happy to take note of our words.” Herath further said.

The appropriation bill for 2016 presented to Parliament today and the budget speech will be held on 20th November 2015.

Read More: Sri Lanka’s Budget 2016: Revenue Rs1.7tn; Expenditure Rs3.1tn