Harsha points out “glaring injustices” in taxing EPF

SJB Colombo District MP Dr. Harsha de Silva decried in Parliament last week what he considers a glaring injustice within the Employees Provident Fund (EPF) taxation intention.

Participating in the debate on new Inland Revenue Bill, he argued that imposing taxes solely on EPF members while neglecting to tax the capital gains of private banks and other entities who acquired bonds during recent financial crises at reduced prices is fundamentally unfair.

He urged necessary amendments to rectify this anomaly within the EPF Act saying the EPF currently holds a substantial sum of approximately 3,400 billion rupees. One proposed strategy for domestic debt optimization suggested raising the interest on EPF investments in bonds from 14 percent to 30 percent.

However, De Silva contended that this transition, initially promoted as a choice, has since been enforced arbitrarily as a mandatory measure.Highlighting a lack of legal assurances regarding the promised nine percent profit for EPF members, he said that it was profoundly unjust to grant substantial profits to those who invested in crisis bonds.

He refuted claims that EPF members would suffer losses of up to 50 percent of their savings during the domestic debt optimization process, stating that legislative amendments should guarantee EPF members an interest rate in line with inflation.

De Silva also criticized the government’s stance on youth empowerment, asserting that its actions have inflicted the most significant harm on EPF members who are approximately 40 years old.

This plea for fairness in the taxation and investment policies of the EPF has ignited a spirited debate within Parliament, as lawmakers grapple with the need for reforms to ensure equitable treatment of all stakeholders.