Sri Lanka, June 22 -- Old tax policies created economic distortions and fiscal imbalances, tax authorities pointed out.

Failure to expand Sri Lanka's tax base created fiscal imbalances and economic distortions, General Treasury and Inland Revenue Department officials alleged.

The officials stated this during an appearance before the Committee on Public Finance, chaired by Member of Parliament Dr Harsha de Silva.

Justifying the government's decision to reduce the annual Value Added Tax registration threshold from LKR 60 million to LKR 36 million, officials said this move aims to bring approximately 10,000 new businesses into the tax net. This will increase the current 35,000 VAT-registered businesses to 45,000.

Instability in tax polic...