Local government taxation to be simplified
Sri Lanka’s local government taxation, licensing and various approval rules are to be modernized and simplified under a 2013 National Budget Proposal to ensure balanced regional development and take economic development to less developed urban and rural areas, Finance Ministry sources said.
Furthermore on the directions of the President more finances will be allocated from the 2013 Budget to settle grievances of local government employees. Tax collection will also be streamlined under this initiative.
This assurance was given by Treasury Secretary Dr. P.B. Jayasundara at a meeting of local government heads chaired by the President at Temple Trees in Colombo this week, the sources revealed
The complex system of local government taxation will be simplified and streamlined while introducing new licensing and transparent approval systems.
The Treasury is looking at sectors in local government authority areas where taxes are charged. Local government bodies such as municipal councils, urban councils and pradeshiya sabhas get most of their revenue from rates on property.
There are 330 local authorities comprising 18 Municipal Councils, 42 Urban Councils and 270 Pradeshya Sabhas in the island providing public services such as primary healthcare, public thoroughfare and community development and public utility services. These institutions also handle the preservation and development of the environment and revenue management. Rates and taxes and assessment of properties come under revenue management.
The Government is looking at ways for local government authorities to collect more taxes as part of the strategy to swell State coffers, a senior Finance Ministry official said.
He disclosed that old circulars that made rate collection difficult would also be changed strengthening the revenue base of local government authorities.
The Government will also support improvement of information systems in local authorities by updating and computerizing databases of rates, taxes and licences, developing financial accounting and asset management systems.
He said local authorities should utilise their revenue for the implementation of projects such as water supply and sanitation including sewerage, drainage, solid waste management, and roads and bridges, including suspension bridges.
It will also have to improve maternity and health centres and other local authority infrastructure facilities such as public markets using the money raised from taxes, he added.
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