Tuesday, November 26, 2013

Food prices and the budget for 2014

The satirical LBO piece, A Dress to Kill Budget, apart from being very entertaining is quite seriously, best summary of the main thrust of this years budget. They could have added that defined professionals (including accountants, lawyers, accountants, engineers and some academics) were given a tax reduction (to a maximum of 16% compared to the current 24%) and, even better, if they were in practice could be expected to be taxed between 12%-16%.

Truly a budget where benefits were doled out to the richer sections of society. Taxes on food, a staple for this regime went up, the tables below will be of interest to anyone who wants to know by how much these changed. (Source: CT Smith Stockbrokers)


Rohan Samarajiva said...

I am curious why conventional economic thinking goes out the window when analyzing this government's budget: it is well known that professionals (lawyers, doctors, etc.) avoid paying taxes on a massive scale. Is it not better to lower the rates and get them into the system. The evidence that this approach is working is at: http://www.lankabusinessonline.com/news/sri-lanka-income-tax-responds-strongly-to-rate-reduction/1396791127

Jack Point said...

Thank you for the comment Mr Samarajiva.

I did see that report and I do agree that many avoid tax, but I am opposed to the discrimination in favour of professionals because it will make administration more complex.

They will need to define recognised bodies, there will be many competing bodies that will want to be included which they will need to sort out. Membership will need to be verified as well.

In anycase, it seems quite unjust simply to discriminate on the basis of professional qualifications.

Would'nt lower tax rates applicable to all be better?