ECONOMYNEXT – Sri Lanka’s Finance Minister Basil Rajapaksa said he was unaware of all the items that are going to be included in a new turnover based tax called Special Goods and Service Tax, which was known only to officials.
“This is a proposal that was brought in the last 2021 budget,” Minister Rajapaksa told reporters Saturday.
“I have been told not to talk about it. Officials have not even told me all the items since I may accidentally disclose them in my interactions with the media for example.
Sri Lanka officials have a habit of hatching taxes in secret and slamming them on the people through midnight gazette even before they are approved in parliament violating the principle of ‘taxation by consent’.
The taxes are imposed as if by Royal Prerogative or ‘bureaucrats prerogative’ critics say.
Minister Rajapaksa said in the case of cigarettes some stock up before the budget expecting a tax hike.
Sri Lanka has a habit of slamming large enough taxes to give incentives for market participants and consumers to stock up before budgets.
The sudden tax changes have created severe uncertainty for business. In 2019 Sri Lanka’s value added and income taxes were slashed when there was no sitting parliament.
Most of them have now been reversed through another 2.5 percent cascading tax called the Social Security Contribution. (Colombo/Nov14/2021)