Several Cabinet Ministers are planning to express their strong opposition, during the next Cabinet meeting on 14 February, against the decision taken by Finance Minister Basil Rajapaksa to impose a Surcharge Tax on the EPF and ETF.
Although the Finance Minister said the tax would be imposed on companies which earn colossal profits, a situation has been created where a majority of the Rs 100 billion revenue that is expected to be collected by imposing the Surcharge Tax, could be earned from the EPF and ETF, and the ministers are concerned about that, a senior Minister said adding most of the Ministers have expressed their vehement objection to it.
He stated that if the Government were to tap into the EPF and the ETF, it will be to the detriment of the Government and warned that the Government should then be ready to face the adverse consequences too.
The Minister opined that with the move made to impose the Surcharge Tax on EPF, the annual interest that is earned by employees through it could also get seriously hampered, thus dealing a crippling blow to the country’s workforce.
He pointed out that the explanation given by the Finance Minister, with regard to the Tax levied by banks, via the Surcharge Tax on EPF and ETF, has also not been clear and hence they were still in the dark about it.
He warned that if this imposition of tax is continued it will most probably politically boomerang on the Government before long. Minister of Labour Nimal Siripala de Silva said if the proposal put forth by the Finance Ministry is ratified the Government will be able to accrue a sum of Rs. 108.5 billion from the EPF alone.
He said in such a scenario the 7 per cent interest that is paid to those members of the EPF could decline even further.
The Minister of Labour said he has already proposed to the Government to defer the imposition of the Surcharge Tax on EPF and ETF till such time a solution could be found.
In the meantime, it is said that Ministers Vasudeva Nanayakkara, Wimal Weerawansa and Udaya Gammanpila are already planning to make submissions opposed to the imposition of the Surcharge Tax on EPF and ETF at the next Cabinet meeting. Already, the SLFP, including its Senior Vice President Minister Nimal Siripala de Silva, too has expressed their vehement opposition to it, while Minister Mahinda Amaraweera has also reportedly held talks in this regard with his party leadership.
When contacted, Minister Nanayakkara said that he too agrees with the sentiments expressed by the Labour Minister.
The Minister of Water Supply said that no recourse should be provided for the Government to levy taxes on the EPF which solely concerns the hard earned cash of the working class.
In the meantime, several trade unions have also decided to launch protest campaigns in this connection by taking to the road on a broad platform shortly.
Meanwhile, the JVP threatened to take legal actions against the Government’s move to impose a 25 per cent Surcharge Tax on the EPF through a new Bill, JVP Leader Anura Kumara Dissanayake said.
He stated the Government has no right whatsoever to pilfer monies from the EPF which belongs to the working class.
“The Government has the responsibility to only manage and supervise it; they do not have any right to squander the EPF to suit their wishes,” Dissanayake stressed.