(MENAFN- Colombo Gazette)
Former President Mahinda Rajapaksa says the Bill to replace the Inland Revenue Act No: 10 of 2006, which is to be taken up in Parliament on Friday the 25th August 2017 is unacceptable.
He says under Clause 5(2)(f) of the Bill, the employer's contribution to a provident fund will be considered a part of an employee's taxable income and this will make EPF payments a burden to employees.
"Under Item 8 of its First Schedule, the tax on income generated by provident funds through their investments will increase from the present 10% to 14% thus reducing the income available to fund members. The tax exemption granted to all places of worship has been dropped in the proposed law and Item 6 of the First Schedule has fixed the tax for such charitable institutions at 14%. According to the Third and Fifth Schedules, places of worship and charitable institutions will be eligible for a tax concession only if the money is used to provide care to children, the elderly or the disabled. The incomes of some places of worship are supervised by the Government and such institutions will be taxed to the maximum whereas other places of worship not supervised by the Government will be able to escape the tax net. Such discriminatory practices will give rise to social tensions," he said.
Furthermore, Rajapaksa says the existing 2006 Inland Revenue Act provides concessions through Chapter III on tax exemptions to various fields deemed worthy of preservation such as local handicraft industries, film and drama producers etc.
"This Chapter also has concessions for various economic activities such as new undertakings in pharmaceuticals, renewable energy, production for import substitution etc. There are over 200 such exemptions in the present law. All those concessions are to be removed by the proposed new law," he said.
Rajapaksa says the policy on which the proposed new Inland revenue law is based, is in keeping with the ideology of the UNP but is contrary to that of the SLFP.
"No member of the SLFP can pass legislation that seeks to tax provident fund contributions, to tax individuals more and companies in the same industry less, to increase the tax burden on the struggling middle class, and to tax places of worship. This new law is weighted against local production, local entrepreneurship, local creativity and local people and favours multinationals and foreigners," he added.
Rajapaksa reminded SLFP parliamentarians serving in the Government that even though the President was elected to power largely on UNP votes, all SLFP parliamentarians were elected to parliament by SLFP/UPFA voters in a campaign led by him and therefore, all MPs of the SLFP are duty bound to vote against the Bill when it comes up in Parliament. (Colombo Gazette)
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