Sri Lankan Inland Revenue Commissioner General Ivan Dissanayake addressing reporters on Thursday (5th July) said that every citizen in Sri Lanka who has the financial capability to take on foreign Travel or purchase a vehicle are considered as Taxable.

Speaking to reporters he further invited that every such individual to come and open tax files to ensure that they commit to their responsibility as taxpayers.

Analysts highlight that Sri Lankan Citizens or overseas travellers from Sri Lanka already pay taxes for their travel as Embarkation Tax and Overseas Sales Surcharge which are included in Airline Tickets and remitted by respective airlines to Civil Aviation Authority of Sri Lanka (CAASL) for over two decade from late 1990’s onwards. Sri Lanka further increased Embarkation taxes from 2016 budget under the new government. Meanwhile, among international market analysts Sri Lanka is ‘named’ as a country that has a government that earns higher revenue by taxing more than the manufacturer’s sales cost of several luxury and non-luxury cars, including the India’s cheapest cars such as brand new Nanos that is sold for over Rs. 1.4 million per unit or higher due to taxes imposed by government, where as the same unit cost less than Indian Rs. (INR) 300,000 or little over Sri Lankan Rs. (LKR) 700,000 in India. (1 INR = Average 2.32 as per Sri Lanka Customs announced rate for 9th to 15th July 2018).

Whilst analysts outline that the new government came to power promising that tax regime will be simplified, Sri Lanka’s government had increased several taxes and had introduced taxes to several new sectors from 2015, quoting that government’s target is to achieve a tax revenue of 20% of GDP (Gross Domestic Product) to the tax levels of pre 2005, despite country’s economy growing by threefold from a US $ 25 billion economy in 2005 to a US $ 81 billion economy by the end of 2014 in less than a decade.

Analysts also point out that apart from government revenue dependent over 1.2 million government workers, the politicians in the country are heavily dependent on tax revenue apart from parliament passed benefits to them, which are not enjoyed by average citizen or a tax payer.

Meanwhile Sri Lanka after a recent election system reforms after 2015 government had increased village and city level politicians from over 4,000 levels to over 8,000 levels making total politicians in the country to over 10,000 in the 65,000 square kilometer geography, despite being the 120th country in size among 196 other countries in the world.

- Reporting by Devendra Francis