Sri Lanka urgently needs a special unit with authority to advise the government on tax systems, said Principal of the Tax & Regulatory Division of KPMG in Sri Lanka, Suresh Perera.
Tax consultant Suresh Perera was speaking at an Advocate Institute hosted event in Colombo on Wednesday.
“Currently Finance Ministers impose taxes without studying the ground situation and this is detrimental to the country. For several decades taxes have been implemented on a trial and error basis,” he said.
The golden rule in tax is that they should be imposed to discourage some sectors and encourage others. For example, in most countries high taxes are levied on alcohol, cigarettes while less taxes are imposed on SMEs, exporters, agriculture, tourism and similar sectors. “But in Sri Lanka this does not happen and in most cases all are taxed at the same rate.”
“Another area is to implement the Robin Hood system where more taxes are taken from the people who have more. But this too does not happen,” Perera said.
In 2019 sweeping tax reduction was done without any survey and if a powerful advisory unit was in place it would have advised and shown the politicians of the adverse effects of reducing taxes.
“Recently the IMF too identified this issue and I think a powerful tax policy unit will be introduced soon which will spell out short or long term policies,” he said.
Sri Lanka had also offered so many tax amnesties. Due to this many people also knew that this was coming and avoided paying taxes until the amnesty was offered.
The Inland Revenue Department is also understaffed as their cadre is around 2,800. This is a somewhat strange scenario as most of the other public institutions are over staffed. They should also be given new technology to collect taxes. “Hence their cadre should be increased and they should be given a bigger salary so that they won’t be tempted to engage in corruption.
“We know that most of the officers are paid less than 100,000 and due to this most youth don’t like to go there,” Perera said.
He said that Sri Lanka also needs a Tax Ombudsman where people could appeal against what they think are unfair taxes.
Sri Lankan athlete Kalinga Kumarage has won the bronze medal in the Men’s 400m event at the Asian Athletics Championship 2025, held in Gumi, South Korea.
Kumarage finished clocking 45.55 seconds.
The gold and silver medals were won by Qatar and Japan respectively.
The Post and Telecommunication Officers’ Union (PTOU) has scheduled a 48-hour token strike starting from midnight today (May 28), PTOU President G.G.C. Niroshana has said.
He added that the strike is being held based on 10 demands, including addressing delays in the recruitment process.
Employees of Michelin Lanka Pvt Ltd, located in the Midigama area of Matara, allege that there are plans to sell the company.
This has raised concerns among employees about job losses, leading to protests.
Workers allege that the company is planning to dismiss them with a minimal severance payment, which they believe is insufficient.
An employee has revealed to the media that after workers were informed about this decision, a newly formed employees’ union has set several demands to the company authorities.
Workers have demanded a fair severance package, but authorities have offered Rs.200,000, (a sum employees consider inadequate) reportedly asking them to provide resignation letters in return.
An employer also states that before the current government took office, Minister Wasantha Samarasinghe had proposed that forming a trade union could help secure workers’ rights. However, the president and secretary of that union are now reportedly in hiding, he employer adds.
Meanwhile, holding a press conference recently, the Inter Company Employees’ Union had revealed that Michelin Lanka Pvt Ltd is in the process of selling the company to the Indian company – CEAT.
According to the union, CEAT has purchased a majority stake in the company.
As part of the deal, it is reported that the Midigama factory of Michelin Lanka Pvt Ltd and part of its operations in Ja-Ela have been transferred to Indian CEAT company.
The Inter Company Employees’ Union had stated there was no issue as a MoU was signed between the two companies to secure workers’ rights. According to the agreement, Michelin Lanka Pvt Ltd had pledged to honor the full service period of affected workers, while CEAT agreed to provide appropriate compensation based on their years of service, the union adds.
Michelin Lanka was previously a part of Camso Loadstar (Private) Ltd, one of the largest suppliers of industrial tyres in the global market.
The situation at Michelin Lanka follows the sudden closure of the NEXT garment factory in the Katunayake Free Trade Zone a few weeks ago, leaving over 1,400 workers jobless.
In a statement, the company cited high production costs as the reason for shutting down operations in Sri Lanka.
