Sri Lanka’s customs coffers to fill, despite tax breaks in budget

Nov 17 (LBO) – Sri Lanka Customs says it will shore up revenues to 240 billion rupees next year, despite a host of import duty waivers in the country’s latest budget. Full Coffers

Meanwhile, the Inland Revenue Department’s tax revenue’s have also grown on improved collections and is expected to reach 260 billion rupees this year.

That is expected to grow to 306 billion rupees next year, of which 120 billion rupees is expected to be income tax. The rest is Value Added Tax, Debit Tax and stamp duties.

Sri Lanka has less than 400,000 taxpayers, of an expected one million who are eligible for taxation. The island has a population of 20 million people.

The government is targeting revenues of 18.5 percent of Gross Domestic Product (GDP), next year, with changes to the VAT and corporate taxes and attempts to bring provincial councils more effectively into the tax net.

We have hit more loopholes in the income tax structure (in the 2007 budget), which is why we also looked at insurance, dividend payments and provisioning by banks, P B Jayasundera, treasury secretary said Friday.

The country needs more income tax. P