July 04, 2020
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    June 17, 2018

    Value Added Tax (VAT) on consultancy fees and other fees in private sector hospitals will be removed next week, Minister of Finance and Mass Media, Mangala Samaraweera told yesterday

    Addressing an event held on Saturday (16) at the Matara Divisional Secretariat to award compensation to the people of the district who were affected by floods in 2017, the Minister said the good governance government came to power giving a bunch of promises to the masses.

    The main promise was to increase the salary of public servants by Rs. 10,000 and within the first 100 days, the government was able to fulfill that promise. In addition, the present government has been able to increase the 1% of GDP spent on education by the Mahinda Rajapaksa government to 3% by 2018. It is hoped to increase it to 6% by 2020.Additionally, the government's intention is to increase the present allocation of 3.5% of GDP for health to 5% by the year 2020.

    The present VAT imposed on private hospital services will be abolished from next week as part of the government's program of giving relief to the people. The present government has been able to increase the Samurdhi allowance threefold.

    All this is done by the government while managing high debt burden inherited from the Rajapaksa government, the Minister said.The total external debt of Sri Lanka has to pay this year alone is 1.9 trillion Rupees and 83% of those loans were taken before 2015. Foreign debt Sri Lanka needs to pay in the next two years is 4.6 trillion rupees and that includes the loans taken by the government in 2012, 2013 and 2014 at high interest rates.

    The government has to tax the public to pay all these debts and the problem is that most of this tax, or 82%, is still paid by ordinary people indirectly while direct taxes from the rich is only 18%. The best example is that in Sri Lanka, which has a population of 20 million, only 400,000 have filed taxes. The government's intention is to bring this ratio of indirect to direct taxes to 60%-40% by 2020.

    "Amid all these difficulties, the government has not ignored the welfare of the people. What you are receiving today is the result of that efforts of the government," the Minister said."During the previous government the relief was given to the government supporters but today at no time we looked at party colors to provide relief," he said. He noted that when looking at the last local government elections about 75 percent in Matara district voted for the SLPP (Sri Lanka Podujana Peramuna). "But what matters to us is providing relief, not your politics," the Minister said.

    Last modified on Sunday, 17 June 2018 09:47

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