Colombo University’s Management and Finance Faculty Business Economics Department Prof.Nihal Hennayake has called to reactivate nearly 1.2 million tax files that had been scrapped by then President Gotabaya Rajapaksa’s government.
Former President Gotabaya Rajapaksa’s government during its tenure had introduced a major tax relaxation by reducing 1.6 million tax files to 400,000 files.
According to the Sunday Observer, Prof.Nihal Hennayake has urged professionals and the government who are under pressure due to the new taxes to reactivate the earlier scrapped tax files as a solution to their issue.
“Reforms are essential for the long-term economic recovery of the country, and all have to endure some pain during that process. All segments of society should act patiently if the stability achieved in recent months is to be maintained,” said Prof.Hennayake.
He made the remarks while speaking at a press conference titled “Current status of Sri Lankan Economy and Future Challenges” held at the Government Information Department yesterday (12).
“We clearly see some improvements currently in comparison to the status of the country in March-April last year, and those were results of strict financial policies. It is a time period which all should act patiently lest we reverse the gains and go into a deeper crisis. If instability builds up that will affect our reviving tourism industry,” he warned.
Pointing out that the International Monetary Fund (IMF) requires the country’s tax revenue, which is only about 8 per cent of the Gross Domestic Product (GDP) at present, to be improved to at least 15 per cent of the GDP, he said the country could not depend solely on the IMF credit facility to resolve the current crisis.
He emphasized that the country should expeditiously move towards an export-oriented economy.
Prof.Hennayake further said, “With the IMF settlement, other lending organizations and countries will not fear to deal with Sri Lanka and this will pave the way for Sri Lanka to re-enter the international capital market. It will give the much-needed space for the country to work on the restructuring of the economy to create debt sustainability.”
“We should not use up the IMF loan to repay our past loans or to pay for regular consumer items because we will fall into a deeper crisis in a matter of a few years as we do not have the capacity to repay our loans,” he also warned. (NewsWire)