President Ranil Wickramasinghe says that officials who do not want to digitize government affairs such as state revenue, tax revenue, etc. should leave those sectors.
“Digitization plays a crucial role in these endeavours (state revenue, tax collection). Those who oppose this transformation should consider stepping aside, as I intend to enforce digitization within a designated timeframe. Any shortcomings that arise should be addressed promptly.”
The president said that not only the forgetting of state revenues, but also the unlimited spending of state money on activities that have no benefit, caused the country’s economic crisis.
President Wickremesinghe made these remarks during the presentation of a report by the committee chaired by State Minister for Finance, Economic Stabilization, and National Policy, Mr. Ranjith Siyambalapitiya, which aimed to propose strategies for generating new sources of income for the state. The report was submitted to the President by State Minister Ranjith Siyambalapitiya at the Presidential Secretariat yesterday (12).
The report encompasses recommendations aimed at establishing a structured framework to attain the revenue goals of the Inland Revenue Department, Sri Lanka Customs, and the Excise Department. It also suggests the implementation of novel approaches to augment government revenue and the creation of a digital economic infrastructure to support these endeavours.
President Ranil Wickremesinghe directed the Minister of State to engage in further discussions regarding these proposals and present them to the Parliamentary Committee on Ways and Means.
President Ranil Wickremesinghe further said;
“In the current economic crisis, a major concern is the improper collection of tax revenue. Some individuals and entities who are obligated to pay income tax fail to do so, leading to a significant shortfall. Additionally, there have been reports of the government experiencing delays in receiving complete tax revenue from customs, as well as similar accusations regarding excise duty.
During this crucial period of economic recovery, it is imperative to establish comprehensive financial discipline in the country. The first step is to control government expenditure, which is currently being addressed. Secondly, the government must ensure that each rupee spent delivers maximum value, as this is often not the case with public expenditure. Therefore, careful attention needs to be given to this matter within the Parliament. Thirdly, there is a need to increase state revenue. To tackle this challenge, a committee led by State Minister Ranjith Siyambalapitiya has been appointed and entrusted with the responsibility.
I extend my gratitude to everyone involved in the preparation and presentation of this report today.
We must explore new avenues for increasing income tax revenues, as outlined in the report. This aspect has received significant attention within our Parliament. It can be argued that the lack of parliamentary discussions in the past two or three years, along with a lack of interest in certain cases, has been a primary cause of the economic crisis. To address this, several inquiry committees on income tax and the fiscal situation have been established. It is within these activities that we should seek out these new approaches.
Furthermore, digitization plays a crucial role in these endeavours. Those who oppose this transformation should consider stepping aside, as I intend to enforce digitization within a designated timeframe. Any shortcomings that arise should be addressed promptly.
Importantly, the income generation methods we have adopted draw inspiration from the United Kingdom. These methods have been greatly refined and improved over time. Thus, we must examine the latest systems and develop the necessary infrastructure accordingly. Proposed amendments to the Audit Act have been put forward to support this objective.
We have extended an invitation to Mr. Francis Maude, who served under Prime Minister David Cameron and has substantial expertise in this area, to visit Sri Lanka and share his insights on sectoral reform.
When the British colonized this country, they prioritized revenue collection and appointed revenue officers for this purpose. Under a unified administration, revenue officers and local officials, known as Mudaliyar (or Mudali), paid special attention to revenue collection. As a result, income did not decline, and it even increased with the development of tea, coconut, and rubber industries. However, since the 1970s, revenue generation has been neglected, and it has been removed from the administrative agenda of the country. Not only has revenue been overlooked, but state funds have been spent without restraint.”
