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Sri Lanka banks could give loan instead of retrospective tax: Finance Minister
Oct 20, 2015
ECONOMYNEXT - Sri Lanka's banks may be allowed to give a loan up to nine times of an assessed value of a retrospective 'super gains' tax, Finance Minister Ravi Karunanayake said.
Banks have the ability to create credit so if they can give loan up to ten times, at about 6.5 percent to 7.0 percent to the government instead of paying the tax, Karunanayake told parliament.
He said the suggestion had come from the banks themselves.
Banks, large companies, and business groups with a number of smaller companies would have to pay an additional 25 percent tax retrospectively.
He said non-bank companies could also look at investing up to three times the tax in a difficult area with high unemployment.
Karunanayake did not elaborate on whether the alternative provisions will be legally enacted.
He said cordial discussions were underway and many companies were supportive.
A series of taxes are being brought to the parliament on October 20, which were not passed by the parliament during an eight-month minority administration that ended in August.
Karunanayake said a series of taxes had been mis-interpreted as a taking revenge but it was not so and it was simply to bridge expenditure to take taxes from people who had the ability to pay.
He said a 1,000 billion rupee tax on gaming companies would also stand. If they cannot pay, they will have to be closed down he said.
Political analysts have pointed out that large taxes that tax payers cannot pay, goes against globally accepted principles of taxation that originated from South Asia.
Taxation is also not expected to be imposed unilaterally on citizens after the end of the 'Royal Prerogative' of the Westminster parliamentary system which a key turning point of freedom of the subjects from the rulers, liberty activists have pointed out. (Colombo/Oct20/2015)
Oct 20, 2015
ECONOMYNEXT - Sri Lanka's banks may be allowed to give a loan up to nine times of an assessed value of a retrospective 'super gains' tax, Finance Minister Ravi Karunanayake said.
Banks have the ability to create credit so if they can give loan up to ten times, at about 6.5 percent to 7.0 percent to the government instead of paying the tax, Karunanayake told parliament.
He said the suggestion had come from the banks themselves.
Banks, large companies, and business groups with a number of smaller companies would have to pay an additional 25 percent tax retrospectively.
He said non-bank companies could also look at investing up to three times the tax in a difficult area with high unemployment.
Karunanayake did not elaborate on whether the alternative provisions will be legally enacted.
He said cordial discussions were underway and many companies were supportive.
A series of taxes are being brought to the parliament on October 20, which were not passed by the parliament during an eight-month minority administration that ended in August.
Karunanayake said a series of taxes had been mis-interpreted as a taking revenge but it was not so and it was simply to bridge expenditure to take taxes from people who had the ability to pay.
He said a 1,000 billion rupee tax on gaming companies would also stand. If they cannot pay, they will have to be closed down he said.
Political analysts have pointed out that large taxes that tax payers cannot pay, goes against globally accepted principles of taxation that originated from South Asia.
Taxation is also not expected to be imposed unilaterally on citizens after the end of the 'Royal Prerogative' of the Westminster parliamentary system which a key turning point of freedom of the subjects from the rulers, liberty activists have pointed out. (Colombo/Oct20/2015)
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