The Federation of Trade Unions of Sri Lanka (FTUSL) called on the Government to charge a turnover tax instead of Value Added Tax (VAT) or to increase the Nation Building Tax by 1% to bolster the State’s tax revenue.

The FTUSL representing wholesalers and retailers maintained that either one of the aforementioned moves would further increase the State’s income from tax.

Secretary of the FTUSL, Indika Liyanage queried as to why Executive President Maithripala Sirisena was allowing Minister of Finance Ravi Karunanayake and Prime Minister Ranil Wickremesinghe to overrule a promise given by him to the wholesale and retail community concerning coming to a consensus regarding a solution to the VAT issue subsequent to discussions with stakeholders.

At a time when inflation is also at about 15% to 16%, increasing VAT would add another 15%, thus making it unbearable for both the consumers and the sellers, he noted.
Traders may even have to close shop, he opined.

How much should those to whom VAT is applicable charge now? He questioned, adding that even though it was at 11% at present, those to whom it was applicable would have to ultimately in reality pay 15%.

The tax bracket and network must be widened to include those who can pay but do not pay, he remarked.

“We do not want VAT. VAT is a complex tax to impose and there will be practical issues in collecting it. Some have not obtained the license. At present VAT is not applicable to us and therefore the Supreme Court’s interim order does not affect us. Wickremesinghe states that the said order will not affect the State’s collection of tax revenue, adding that a revised bill on VAT would be passed backdated with retrospective application from May onwards. Why is Sirisena letting Wickremesinghe and Karunanayake go about in this manner?” Liyanage pointed out.