The government debt including local and foreign sector has increased up to 5.3% in 2015 from a 2.6% in 2013. (CBSL,2015). The expectancy of higher subsidies from the civilians and higher consumption behaviors has its own downturns regardless of the economic growth achieved in the recent years. Under these circumstances, the increase of taxes especially the “direct taxes” is a bold step taken by the government towards reducing the budget deficiency expanded throughout the years. With the expansion of government expenditures up to 2,328 billion from budget 2017, the expected growth in relation to demographic bonus is a “must” in perceiving economic development.
The main focus in the budget discussions varies according to the economic role the person plays. As an undergraduate who follows economics, it’s the development strategies, government’s vision on economic growth and the taxes implemented on FDs I’m much more concerned with. But how does a person with the lowest wage feel about this budget? Is it fair that the government has introduced various taxes in order to compensate the transfer payments in return?
The taxes burden Sri Lankans bear are quite similar to the burden the government has to bear to subsidize. The fact that the indirect taxes are more than 50% of the total revenue earned by the government is quite unfair as only 18% of the total taxes are taxed for the people who can really pay. Despite the fact that the government consists of a large amount of ministers, who are being granted many benefits including the electricity bills, the transportation costs and many more, these costs are felt more by the people under the poverty line than the ministers and the people who drive luxurious cars. So is it fair that the government has increased indirect taxes including VAT and excise taxes rather than increasing their revenues through charging on luxurious goods more wealthy people spend on?A person could argue that as a nation we are heavily subsidized for health and education. Isn’t there any other way to increase government’s revenue and to reduce the budget deficit without transferring heavy tax burdens on workers with normal wages who make their living without much ease and also without reducing subsidies given that make this society a better place?
It’s time to rethink the government’s strategies.
Opinion about increase of taxes through a civilian’s perspective…