The Auditor General (AG) has called for the appointment of an expert team, to review the adverse impacts on the economy due to the tax concessions introduced at the end of 2019 and to determine whether the objectives of such concession were achieved.
In a report titled ‘special audit report on financial management and public debt control in Sri Lanka 2018-2022’, the Auditor General observed that the decision to provide a tax concession in 2019 resulted in a considerable drop in tax income in 2020 and 2021.
Tax concessions were imposed in 2019 through removal, reduction and exemptions of taxes with the objective of achieving long-term economic growth. Finance Minister Ali Sabry, however recently observed that such concession was a mistake and that it should be rectified. Further, such cut also resulted in Sri Lanka losing access to international financial markets.
BY Faadhila Thassim