Sri Lankans ‘let off steam’ on taxing the people in BT-RCB poll
Ajoint BT-RCB poll this week on taxes and its impact on the people drew some interesting conclusions with a somewhat reassurance to the government – most people agree that taxes must be imposed and the public must pay.
The results of the poll are on Page 1.
Many views were expressed in Colombo and Galle where the RCB street interviews were undertaken and also in the email poll by the BT. Many of the respondents were ‘letting off steam’ in anger against the system and viewed the poll as a way of expressing their disgust at the state of affairs.
From RCB in Colombo:
Only 10 per cent of the business class pays taxes. Some businessmen display huge advertising boards and add advertising costs to set off against taxes. Some connive with retired tax officials who manipulate data through their friends in the Tax Department. The government must clean up this institution. Reduce spending of minsters and use those funds for public relief. Reduce tax on oil. Today’s businessman has to add salaries, transport and other costs. So we have to manipulate the tax margin otherwise we have no profit margin (from a trader). If taxes are properly collected, more welfare can be provided to the people. Confiscate the properties of rogue businesses (protected by the state) which borrow loans and rob the country of much needed taxes. While taxes are needed for education, health or other welfare services, Sri Lanka needs a radical fiscal and tax system. The shift of the pendulum of the state power has resulted in losses to the country; not being able to recover the expected revenue. There are many ways to improve the revenue system. It is unjust to impose taxes on water and telephone facilities. Tax evasion from top businessmen to SMEs should be stopped. Some firms resort to new registrations under the Companies Act to evade taxes. More transparency needed in the tax system. Although the state imposes taxes we have not benefited (tuk-tuk driver). Although taxes have been imposed taxes the facilities are not in comparison to the revenue. The public is unaware on the state of the revenue and expenditure. Who checks the taxman? They are a law unto themselves. The population is passive and not informed on taxes. Everyone is interested in filling their own pockets. If as assessment is taken as to whether at least 25 per cent of the eligible persons are paying taxes the truth will come out. Taxes are a must. But taxing the whole income is not proper. How do we know if tax money is properly channeled to maintain welfare systems? Some countries maintain welfare systems without charging taxes. We have to study those systems.
From RCB Galle –
Taxation will not produce high quality goods. It is by innovation that one can pay reasonable taxes. Some reduce the standards of quality to pay taxes. While the major business players get tax relief, the people are compelled to pay indirect taxes. Taxes have not passed any benefits to the public because the state borrows foreign funds to develop the country. Among many issues, chil- dren are forced private tuition in place of free education. State bureaucracy is just wasting time. Some establishments are overstaffed. Ministers ask and get perks sans performance. Who pays for this? Frustrated with system Although the ancient system of collecting revenue was the bee to collect honey without harming the flowers the present exercise is to destroy the flowers. People are frustrated by this tax system. Multinational companies benefit by tax concessions. Every government has followed this system and fooled the public. This administration is no exemption. Public services are maintained by tax money. However the politicians are using all this money and this is one of the reasons why businessmen evade taxes, because they have no faith in the system.
From the BT poll –
Taxes are supposedly for the purpose of levelling different strata of income levels whereby the rich subsidises the poor. But this is not happening. For example to exempt all senior citizens from WHT on interest regardless of the quantum is ludicrous to say the least! If VAT is applied properly, it would not have the severe impact that some anticipate. It is important for the government to tax the rich more than it does ordinary citizens. There are two groups of businesses in terms of compliance with payment of taxes. The first category considers the payment of tax a corporate responsibility and part of good governance. They realize that the cost of high budget deficits could come in the form of high interest rates, neglect of health and education which affect productivity, quality of goods and services and discipline, impaired security and poor infrastructure. These are greater impediments to business than paying taxes. If tax compliance improves the rates of taxes could be reduced helping business, people and competitiveness of Sri Lankan goods and services.
Tax dodgers
Tax dodgers are generally establishments owned or managed by uneducated, unprincipled and selfish persons. Some years ago at a meeting of the Joint Business Forum the then chairman of the Ceylon Chamber of Commerce was asked 'are you working for the private sector or the State?' when he espoused the need to pay taxes. Readiness to pay does not mean that a business should avoid tax mitigation plans or take advantage of methods to reduce taxes within the law. While everybody who can should pay taxes, the ratio of businesses to tax files opened is appalling. This Yahapalanaya lot is a bunch of losers. The concept was good at the outset. Then what did they do? Thugs and nefarious scoundrels were brought in ostensibly to scuttle MR - what have we now? A tenuous and uneasy sort of political jousting that is guaranteed to set us back 50 years! I don’t see enough of the taxpayers’ money working for the tax payer - else we'll have better roads, etc. Widen the tax net. Make declaration of assets mandatory. Here is a suggestion - Stand on any street corner and note the registration numbers of luxury vehicles...then go to the RMV, trace the owners and then open a tax file! The recipients of free education are on the roads like common rabble protesting about this, that and the other when they should be making the taxpayers money work, develop themselves and do Sri Lanka proud through a responsible job!