• MP Eran says bringing down threshold will increase State dependents 
• Notes taxing lower earners is solving one problem by creating a bigger one

If the Samagi Jana Balawegaya (SJB) ever gets elected to the helm of power, it will renegotiate the Personal Income Tax (PIT) minimum threshold with the International Monetary Fund (IMF) and bring it up to Rs. 250,000 minimum, MP and ex-banker Eran Wickramaratne told The Daily Morning Business. 

It should be noted that the initial minimum taxable monthly income proposed by the IMF was Rs. 45,000, as claimed by Co-Cabinet Spokesman Bandula Gunawardana at a press briefing a few weeks ago, but the Government managed to negotiate and bring it up to Rs. 100,000.

Speaking to The Daily Morning Business, Wickramaratne stated that the minimum taxable income should be set at Rs. 250,000, as some earners are required to look after themselves and their families and hence cannot be considered a “burden” to the State. 

“They are working with dignity. Don’t go in and mess with that, otherwise, they will be dependent on the State, such as for benefits and welfare. This is not the first time we have highlighted this issue; we said the same when the Budget was presented in Parliament. People will come up with all kinds of theories. But you have to be practical because if you create an increasingly dependent class, it will be like trying to solve one problem by creating a bigger one.”

Last week, SJB MP Dr. Harsha de Silva said an SJB government would implement a progressive corporate tax, where rates are raised according to sectors, and high-income earners are charged higher personal income tax rates.

Further, he claimed that the SJB has a plan to lift up Sri Lanka’s contracting economy, and added that there should be economic reforms, with heavy reforms in trade and investment policies specifically, to achieve it.

“There is no need for us to accept everything the IMF wants us to do, but we should present a proper plan of our own,” he said, adding that those plans are already prepared by the SJB through the 10-point Common Minimum Programme for Sri Lanka’s economic recovery released last year.

He noted that the current Government, the World Bank, and the IMF have been provided with a copy of this programme.

The revised personal income tax rates came into effect from 1 January onwards in a bid to increase government income.