VAT can be reduced if Direct tax revenue increases – Min. Mangala Samaraweera
Four orders of the Excise Act were taken up for debate in Parliament yesterday (June 7).
Minister of Finance and Mass Media Mangala Samaraweera said if the Government is able to increase the revenue generated through direct taxes the Government would be able to reduce VAT by at least 2.5%. He noted that the reduction in the prices of beer had lead to a reduction in the consumption of other alcohols.
Minister Samaraweera stated that he strongly believes that the prices of arrack, which is commonly used by the general public, should be reduced. State Minister of Fisheries and Aquatic Resources Development Dilip Wedaarachchi also echoed this sentiment.
Joining the debate JVP MP Sunil Handunetti sais that one way to increase direct taxes was to enforce the taxes imposed on distilleries especially companies similar to W.M. Mendis. Handunetti charges that the company had paid more in bribes to politicians that they had paid taxes.
Speaking on the reduction of arrack prices, MP Ravi Karunanayake said reducing the prices of beer and increasing the prices of arrack will only result in more beer consumers and will not increase Government income. He added that Sri Lanka does not have the capacity to pay high direct taxes and noted that whatever foreigners from the IMF and World Bank say, they are the people who know how to increase the revenue of the Government.