Tax files, IDs for all above 18

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By 2017-07-09

BY PANCHAMEE HEWAVISSENTI

Minister of Finance Mangala Samaraweera stated yesterday that the Ministry of Finance is working on a plan to introduce a Taxpayer Identification Number and a Tax File to be opened for all citizens of Sri Lanka who are above 18 years of age.

"Every person who is an income earner will be taxed, based on his income under this mechanism. Although we plan to open a Tax File and to provide a Taxpayer Identification Number to all citizens above 18 years of age, in case of any person not earning income......during the year, he will be released from paying tax but the file will be brought forward to the next year," he said. This mechanism will enable tax penetration of all layers of society, he added.

Minister Samaraweera told Ceylon Today that it is a globally accepted system to provide every citizen above 18 years of age with a Taxpayer Identification Number and opening of a Tax File under his/her name.

The present taxpayer composition of Sri Lanka comprises 20% direct taxpayers and 80% indirect taxpayers. The Ministry is planning to bring down the indirect tax payer composition from 80% to 60% and to raise the direct tax payer composition from 20% to 40% by 2020 in order to inject revenue equity across the economy of the country.

"As a first step towards adopting this mechanism, we are hoping to present the new Inland Revenue Act as soon as possible" the Minister said, adding that the Department of Inland Revenue should make adjustments in its revenue collection procedures to effectively implement the new mechanism.

The Minister said the Inland Revenue Act will be taken up for debate in Parliament at the end of July or in early August.

The scheme to issue Tax Identification Numbers and open Tax Files for everyone above 18 years of age will be completed by the end of year 2018.

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