Need for Rs 231.5 bn to cover payments to CPC shows how mispricing burdens taxpayers – Harsha

Reiterating the urgent need for tax reforms, Chairman of the Committee on Public Finance (COPF) Dr. Harsha de Silva, MP, recently pointed out that regardless of various claims tax revenue stood at only 8% of GDP, a stark contrast to the 20% it once represented during President Ranasinghe Premadasa’s time.

The former UNP State Minister and current top SJB spokesperson on economic matters addressed the issues at hand at an event held under the theme, “Insights with Harsha: Smart Policies & Economic Revival” at the Lakshman Kadirgamar Institute (LKI).

Dr. de Silva commented on critical issues, starting with the pressing need for tax reform. He said tax revenue currently accounted for only 8% of GDP as opposed to 20% during Ranasinghe Premadasa’s presidency. The MP emphasised the importance of revenue rationalisation while ensuring fairness in the tax system.

Another vital issue raised during the event was the adoption of cost-based tariffs or cost-reflective pricing. The MP noted that the approach helped reduce government expenditure and the funds so saved could be used to support loss-making enterprises. Referring to the need to allocate Rs 231.5 billion for the CPC he said mispricing could be a burden on the taxpaying public.