Pay Up!

Pay your taxes because public services aren’t free

Both the government and the people must take responsibility for creating a sustainable tax system. The government must bring all those with taxable income under the relevant tax brackets, and ensure that the system is simple and reasonable.

In turn, the citizenry must recognise that paying taxes is a fundamental responsibility of living in a civilised society and comply with their tax obligations.

Tax evasion undermines a country’s economic health and deprives its people of critical welfare benefits. Sri Lanka’s heavy reliance on taxes means that all citizens must pay their dues and the government has a responsibility to spend this money wisely. Approximately 85 percent of the Sri Lankan government’s revenue is derived from taxes.

When tax revenue drops, the government must either cut down on essential social welfare programmes – such as education, healthcare and pensions – or bridge the gap with borrowed funds. Since Sri Lanka’s total debt currently exceeds 125 percent of its GDP, borrowing is not a sustainable solution.

Unfortunately, Sri Lanka’s tax policy inconsistency has led to uncertainty among individuals and businesses.

Moving from one extreme of reducing taxes to the other of increasing them has resulted in a weak, broad-based tax administration that’s allowed a large portion of people and businesses to evade paying their dues.

The tax system must be administered efficiently and effectively with a fair distribution of the burden. Meanwhile, Sri Lankans must comply with their tax obligations because only then can we build a brighter future for us all.

Tax evasion undermines a country’s economic health and deprives its people of critical welfare benefits