UNP challenges legality of proposed GST bill

The United National Party has challenged the legality of the proposed GST bill, claiming it was by-passing the sovereignty of Parliament.

Speaking at a press conference today UNP Working Committee member Dinouk Colombage claimed that the proposed GST bill will remove public finances and taxes from the purview of Parliament and place it under a Minister of the Government’s choosing.

“Historically the taxes of Sri Lanka have been the responsibility of Parliament, it is the legislature that decides on the method of taxation and the rate. However, this bill will remove that function from Parliament and hand it over to a Minister of the Cabinet.”

Colombage added that under the GST bill the revenue earned from this tax will be collected in a separate account controlled by the Minister.

“Government revenue including taxes are collected in the Consolidated Fund and Parliament decides on its dispersal. Why has the Government redirected earnings from GST to a separate account? There is no oversight into this account, the Minister will be free to decide on how this public money will be spent.”

He further added that the Minister will now be empowered to manipulate the revenue of the Government. “The tax imposed on goods and services under the industries liable for GST will now be decided solely by the Minister. This means that he can effectively establish a monopoly within those industries to his and his supporters benefit.”

Colombage also questioned whether the introduction of the GST would see a form of double taxation imposed on the public. “In other countries such as India, when GST was introduced VAT and other taxes were abolished. However, in Sri Lanka we will see both GST and VAT charged on services. The Government must immediately clarify what GST will be charged on and whether or not VAT will be abolished.”

Chairman of the UNP Youth Front and Working Committee Member, Shehara Herath, questioned whether the introduction of the GST bill will see the foundation laid for yet another sugar scam in the country. “In 2020 the tax rate for imported sugar was adjusted to allow specific importers to import sugar at a lower rate, the estimated loss of revenue to the State on that occasion was Rs. 15bn. If this Bill is enacted it will empower the Minister to alter the rates of taxation on goods and services as he wishes, with no checks-and-balances.”

The UNP urged the Government to immediately withdraw the GST bill and seek out the advice of professionals who can assist them in restructuring the financial programs in the country.

Herath questioned whether or not the decision to avoid going to the IMF for such assistance was due to the Government’s desire to introduce the GST bill which will see no transparency or accountability in the collection of taxes. “If the Government wishes to increase revenue then they must do so adhering to the laws of the country. The processes to collect taxes and revenue are in place, so why won’t this Government adhere to those processes without introducing new ones?” (Colombo Gazette)