CA Sri Lanka’s President, Sanjaya Bandara presenting a token to Murtaza Jafferjee at the event.
Sri Lanka should avoid ‘distortion’ when implementing tax reform, said Chief Executive Officer of JB Securities Ltd, Murtaza Jafferjee yesterday at the two-day CA Sri Lanka organized second Tax Symposium focusing on macroeconomics, IMF proposals, and the way forward. He said that in Sri Lanka diesel is taxed lower and petrol is taxed at a higher tier.
“However in other countries in the world they have higher tax value for diesel and it’s more expensive than petrol.”
The arguments in Sri Lanka are that if the government increased duty on diesel it will have a negative impact on the transport and many other sectors. He also said that ‘distortion’ of taxes can be seen when tax holidays are provided to various sectors and suggested that there should be uniformity in them. “Lanka Lubricants have to pay a higher tax while LIOC pays less in the lubricant business.”
A key highlight of the forum was the special segment where officials from the International Monetary Fund (IMF) and the World Bank were invited to help participants understand property tax and wealth tax proposals, which will be implemented in due course as per a deal reached between the IMF and the Government of Sri Lanka. During the special segment, Economist at the Tax Policy Division of the IMF’s Fiscal Affairs Department, Sebastian Beer, shared his views relevant to the Sri Lankan context.
During his presentation, Beer, who has provided technical assistance to over 20 countries on how to structure their tax policies, helped the audience understand the impact of property taxation and how it will affect the Sri Lankan economy. Senior Economist attached to the Fiscal Policy and Sustainable Growth Unit of the World Bank, Alastair Thomas, delivered a detailed presentation on wealth taxation in developing economies.
He also covered capital income taxation, which is interrelated to issues surrounding wealth tax, while also explaining in detail good tax policy principles and the benefit of introducing such taxes to developing economies.