Unprecedented tax relief from this Government – Trade Minister

There was no other Government in Sri Lankan history that granted more tax relief than the current Government to provide a cushion to the entrepreneurs and the public who had been heavily taxed by the former UNP led Good Governance Government, said Trade Minister Dr. Bandula Gunawardena yesterday.

He said that the tax revenue in 2014 at the end of Mahinda Rajapaksa government was Rs. 1,050 billion and thereafter its successor the Good Governance Government imposed tax rates to collect more than Rs. 1,700 billion a year which was an excessive burden.

The people were not taxed in this manner even when LTTE terrorism prevailed in the country. He added that the incumbent Gotabaya Rajapaksa administration reduced taxes by Rs. 520 billion to provide relief to the public.

“However this Government faced an unprecedented and unexpected pandemic and hence it had to face an unexpected expenditure on top of a badly affected economy due to the previous good governance government’s ill-fated fiscal management policy,” Minister Gunawardena said.

“The unprecedented drop in economic growth rate during the previous regime was aggravated by the Easter Sunday attack. However the COVID 19 pandemic too magnified the challenge before this Government.”

He made these observations commencing the Second Reading debate under a Resolution under the Local Treasury Bills Ordinance, two Regulations under the Imports and Exports (Control) Act (No.1), a Supplementary Sum and two Resolutions under the Essential Public Services Act in Parliament.

Minister Bandula Gunawardena said the Cabinet approved Supplementary Estimate worth Rs. 200 billion should be approved by Parliament since it is required to face the COVID-19 challenge. He added that it was utilized to provide relief to COVID-19 affected people, provide treatment, run Government services, expedite development and enhance the health sector to face the challenges. He added that the RS 43 billion out of the Rs 50 billion allocated through the Budget for urgent and unexpected expenditure has already been used for COVID 19 control.

He said the challenge levelled by COVID 19 on the country’s economy was so grave that the growth rate fell for the first time in history to minus 3.6% last year. He added that the Government’s revenue last year was Rs. 1,343 billion last year while recurrent expenditure amounted to Rs. 2,548 billion including Rs. 1,052 billion for salaries and pensions of Government servants, Rs. 980 billion for loans and interest and Rs. 717 billion for relief etc. He said each Government took loans to bridge this deficit.

When Chief Opposition Whip Lakshman Kiriella said that the Government was deprived of Rs. 800 billion through reducing the tax rates, Minister Gunawardena said the Gotabaya Rajapaksa Government did so as the UNP Good Governance government had taxed the people unnecessarily and unjustly.

(Source: Daily News – By Sandasen MARASINGHE, Camelia Nathaniel and Amali Mallawarachchi)