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Letter:
Private sector employees discriminated

At present Private Sector employees feel that they are discriminated by the government despite the contribution made by them towards country’s development.

1. They do not enjoy income tax exemption on their salaries like government employees.

2. Terminal benefits (retiring gratuity, EPF & ETF refunds ) are also taxed.

3. Regular salary increases given by the government to their employees are not granted to private sector employees. It may be true that the government do not wish to get involved in the activities of private sector.

Government could grant tax concession to ease the problems faced by private sector employees.

1. Tax exemption limit be increased to 600,000/- per year. It was fixed at 300,000/- for 2004/2005 and there is no change during the past 6 years.

2. Authorized deduction (EPF contribution, insurance premium etc.) be increased from 75,000/ (fixed in 2005/2006) to 150.000/

3. At present the exemption for terminal benefit is Rs. 2,000,000/- for service up to- 20 years. 5,000,000/- for service more than 20 years. It is better to be fixed at 15 years instead of 20 years.

Medical expenses in respect of treatment to be taken in a foreign country (not available in Sri Lanka government hospitals) be allowed as deductions from assessable income. Some services are available in private hospitals in Sri Lanka. They also could be considered as medical expenses. A team of authorized doctors could confirm this.

The special medical expenses incurred on behalf of husband, wife and dependent, children, be allowed as deduction on both husband and wife’s income. Any un-recouped amount be carried forward to subsequent years.

Strictly speaking, it is the government’s duty to bear the special medical expenses, but as an interim relief I am suggesting this.

I hope these would be included in the next budget proposals for 2010.

S. R. Balachandran

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