- Proposes tax reforms; wants PAYE tax upped to Rs. 200,000 bracket
The Frontline Socialist Party (FSP) has proposed the Government to conduct an in-depth investigation about tax reliefs provided to monopolistic companies and to restructure such schemes in a fairer manner.
The party further urged the Government to take immediate steps to rectify tax reliefs that are being misused.
The FSP put forward this proposal in a list of proposals submitted for the Government to take into account when preparing the Budget 2025. In a press conference last weekend, it said that the Government should increase direct taxes with the aim of changing the existing ratio between direct taxes and indirect taxes, which is 15:85, to 40:60 by 2026.
In its list of proposals, the FSP added that the Government should initiate legal action to collect around one trillion rupees of defaulted tax revenue. Adding that the Government should abolish Imputed Rental Income Tax, the FSP proposed to introduce two new types of taxes, i.e. Wealth Tax and Super Gain Tax, to get more tax revenue from the wealthy and companies that make high profits. In addition, it was proposed to provide a complete tax relief for micro- and small-scale entrepreneurs in order to protect them, while also introducing a profit-based incremental tax system for medium- and large-scale entrepreneurs.
“Reduce the overall Value Added Tax to 12%. Provide relief for the people by completely exempting from taxes selected goods and services pertaining to food, medicines, medical equipment, sanitary products, and school equipment,” it proposed, further urging the Government to increase the Pay As You Earn Tax’s threshold to Rs. 200,000 a month.
In addition to tax-related measures, the FSP said that the military expenditure should be reduced, doubling the funds allocated for education, health services, and public transport, and increasing pensions and allowances paid for the elderly.
“Instead of temporarily halting the enforcement of the Parate Law, abolish it completely,” the FSP added.