The Association of Accounting Technicians of Sri Lanka (AAT) held a technical seminar on March 7 on the presented budget.
The event was sponsored by Lake House. The event began with a presentation by Thanuja Perera a tax policy advisor to the Ministry of Finance. Her presentation focused on the tax implications and computations of proposals within the budget. The presentation was followed by a panel discussion featuring experts on taxation. State Minister of Finance Eran Wickramaratne attended the panel discussion. Ganaka Amarasinghe of the Raigam Group moderated the discussion. Duminda Hulangamuwa of Ernst and Young and R Gajendran of Gajma and Company were the other members in the panel.
Thanuja Perera’s presentation touched on many proposals in the budget. Her analysis featured comparisons with previously applicable taxes. She also set out a timeline by which certain taxes would be implemented and applicable for collection. She also justified changes in the tax code.
She pointed out the amendments to the luxury tax on vehicles.
This tax will be applicable on vehicles imported after March 05. This tax will be taken in as a one-time payment on newly imported vehicles. This is in contrast to the current system of payment over seven years. The tax will be calculated on the value and band of engine capacity.
The tax on new vehicles shall no longer be divided into Luxury, Semi Luxury, and Dual Purpose. The tax will be payable at time of import.
Perera conceded that the proposed NBT on credit cards was not a perfect system however she justified the use of such an instrument as it placed local and foreign players on a level playing field.
She put forth the Treasury view that the banking sector with their sophisticated systems was capable of collecting the tax. She likened the system to its predecessor (stamp duty collection).
Ulangamuwa opened the panel discussion by pointing to the loss-making SOEs. He suggested that they were a drain on resources and their mismanagement prevented reinvestment into key sectors of the economy. He illustrated the point that a subsidy must at some point be balanced with an increase in taxation at another point.
This could result in productive sectors of the economy subsidising unproductive sectors.
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