Tax expert N.R.
Gajendran says Sri Lankas failure to meet tax profits targets despite tax hikes is due to the tax leaks stimulated by tax evasion.Joining Ada Deranas current affairs program @HydePark, Gajendran even more revealed that digitalization of proceedings of the Inland Revenue Department (IRD) will significantly contribute to boosting efficiency while also eradicating loopholes which help with tax evasion.All the taxes have gone up, however were still struggling to achieve 13.9% to 14% tax profits.
Next year, 2025, were wanting to reach 15%, which is still below what we achieved in the early 90s, 22% tax to GDP ratio.
The majority of the countries, even developing nations attain 18% - 22% taxes, Gajendran mentioned.If you wish to have macroeconomic stability, when we think about an industrialized country, tax to GDP ratio need to have to do with 28% - 30%.
Now we still have this gap.
Were collecting so much from people and were still falling short.
Next year, at our best, well reach 15%.
We had 22% before, in 2022.
Where is this 5% - 7% space? Im informing, that is the evasion and scams and corruption, he added.This money is not with the small taxpayers.
It is with the huge taxpayers.
Reforms can not occur when it is corrupt.
If higher-ups are corrupt, all subordinates will be corrupt, as the previous President stated, Gajendran emphasized.Meanwhile, Tax Consultant, Attorney-at-Law Suresh Perera revealed that tax evasion is most often committed by top tax payers and not those in the lower tax brackets, although they have actually been at the centre of attention when drafting tax legislation.Commenting relating to the matter, Perera emphasized the tax leakage exists due to inappropriate enforcement of laws, repeating that the tax leakage occurs due to evasion by leading tax payers.The law is there, however its not been followed.
What is happening in here is that now the focus is on little man, perera added.Furthermore, he stressed that policymakers focus on individual tax payers, stressing that the policies ought to be made focusing on big corporations, from which a huge tax revenue is being collected.Watch the complete programme above