News
Many sectors seek VAT relief and more budgetary support
View(s):By Kasun Warakapitiya
Many sectors are expecting tax relief, incentives, and salary anomalies to be sorted, while others want infrastructure improvement from the upcoming budget.
Educators, state workers, private sector employees, importers, transport services providers, farmers, and industrialists are among those hoping for relief.
There are greater expectations of more relief in an environment of reduced corruption and unnecessary expenses. However, some claimed that promises made during elections are yet to be fulfilled.
K.A.U Konthasinghe
In the education sector, teachers, principals and nonacademic staff expect salaries to be revised in keeping with the soaring cost of living.
Ceylon Teachers Union General Secretary Joseph Stalin told the Sunday Times the government should fully settle salary anomalies, as it was one of the main promises before elections.
The union also expects the government to allocate 6% for education and wants to know the progress achieved in the education sector so far.
Mr Stalin said he expects VAT on school equipment to be removed.
Another sector with high expectations is public transport.
Private Bus Owners Association Chief Gamunu Wijeratne said the government should regulate vehicle imports and take measures to improve public transport. Road infrastructure should be improved, and funds should be allocated for this, he said.
Railway officials are expecting more funds for rolling stock.
Locomotive Operating Engineers Union President K.A.U. Konthasinghe said more trains are needed and that existing trains should be refurbished. Signal systems should be improved.
The budget should give priority to improving train operations, as trains are widely used by working-class people.
Vegetable farmers are calling for better prices and mechanisms to transport their produce to economic centres with minimum spoilage. Paddy farmers expect a reduction in prices of fertiliser and pesticides. They also want fertiliser subsidies.
Anuradhapura District Maha Warimarga Ekabbadaa Samithiya president Punchirala Ratnayake, 65, said chemical fertiliser prices have soared and that it should be provided at affordable prices. He also wants a good price for paddy.
Mr Ratnayake said taxes on agricultural equipment and vehicles should be waived to reduce paddy production cost.
Small- and medium-scale paddy millers expect credit.
Marandagahamulla Rice Producers Association President B.K. Ranjith suggested a relief loan scheme.
Even the Poultry Producers Association has high expectations. President Ajith Gunasekara said VAT on ingredients used in animal feed should be reduced.
According to him, 80% of the poultry feed ingredients are imported. So the reduction of VAT would greatly reduce costs, allowing them to reduce the price of chicken and eggs.
Mr Gunasekara said only 50% of the corn needed for animal feed is cultivated locally. The remainder needs to be imported. He called for taxes imposed on corn to be reduced.
He said the government should assist poultry product exporters.
The Essential Food Importers Association proposed that the import ban on food items such as canned fish and turmeric be eased.
The group suggests removing import restrictions on moong beans, orid, cowpeas and groundnuts and reducing customs duty/special commodity levy from Rs 300 a kilo to Rs 100 per kilo.
They also called for re-implementing the advance income tax payment at the point of Customs (a tax similar to the Economic Service Charge, which was abolished in 2019). This is an effective system implemented by many countries, which also will eliminate tax evasion by many.
A spokesperson for the association said there were instances where some unscrupulous traders imported goods for a few years and disappeared. So the Inland Revenue Department will not be able to collect income tax. It is unfair to importers who pay their dues.
Pensioners expect salaries to be adjusted in line with the cost of living.
The National Organization of Retired Teachers and Principals expects pension discrepancies to be resolved if salary anomalies are rectified and funds allocated in the 2026 budget for implementation of a 20% salary increase as recommended by the Subhodanai Committee in 2022.
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