Oct 30, 2015 (LBO) – Sri Lanka is looking at the possibilities of connecting the island’s revenue collection office with tax payers directly to streamline tax payments.
Central Bank Governor Arjuna Mahendran said they are considering SWIFT payment gateway as a one option.
“Internet payment solution system called SWIFT can link up the tax payer with the Inland Revenue department seamlessly over the internet,” he said.
“So it becomes easier for people to pay their taxes.”
More than 10,800 banks, institutions and corporate customers in over 200 countries uses SWIFT to conduct business operations.
Mahendran was addressing the 27th Anniversary Convention of the Association of Professional Bankers which was held under the theme of ‘Innovate to win’.
Governor Mahendran however said it is pathetic to see the low tax collection of the government where the country still taxes its people like a Sub-Saharan country.
“We only managed to get government revenue about 10 percent of GDP which frankly is quite pathetic. I don’t mind saying so in public,” he said.
“The government can’t raise sufficient taxes to pay its debts; let alone the rest of its expenditures which is paying for public servants etc, etc.”
Mahendran said it is a principle challenge for innovators in the next five years.
“It’s a simple problem to formulate but the solution seems extremely difficult and that’s where I think the real challenge for innovators,”
He said the country will make it or break it simply on the issue of weather it can tax its people sufficiently in an equitable manner.
“So, everybody bears the burden of development into the future on a fair basis. That’s going to be the challenge.”
Sri Lanka’s tax system is fairly regressive and most of the taxes are derived from indirect taxation where poor can tax more than the rich.
“We have to simplify our tax system. In the last count we had over 30 taxes that people had to pay. People don’t like to pay for something that they don’t understand.”
Mahendran further said the government has to rationalize various exemptions provided for tax payers.
Meanwhile Prime Minister Ranil Wickremesinghe is to make a special statement in Parliament on the 05th of November on Medium Term Economic Framework of the Government.
Attention will be focused on the country’s future economic strategies, large scale investments and granting relief to the ordinary masses ahead of next year’s budget.