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FSP urges NPP MPs to reject unfair tax policies
The Frontline Socialist Party (FSP) has sent a letter to all MPs of the ruling National People’s Power (NPP) government, urging them to reject what it describes as a severely unfair tax policy outlined in the 2025 Budget. The party has warned that the proposed tax structure will place an unbearable burden on the public, while at the same time granting significant concessions to large corporations and wealthy individuals.
The 2025 Budget, which was presented to Parliament on 17 February, is scheduled for a final decision on 21 March. The FSP stated that tax policies were generally designed to reduce economic inequalities, prioritise economic development, and regulate market consumption patterns. It argued that the 2025 Budget approached taxation solely as a means of generating government revenue, disregarding the economic hardships faced by the majority of the population.
The FSP has raised concerns over the significant increase in Value Added Tax (VAT) on goods and services, which is set to rise by 25.94% in 2025. The government aims to increase tax revenue from Rs. 2,201 billion in 2024 to Rs. 2,772 billion in 2025, resulting in a notable rise in the financial burden on ordinary citizens. According to the FSP’s analysis, this means that in 2024, an average Sri Lankan household paid Rs. 31,623 per month in indirect taxes on goods and services. In 2025, this figure is expected to increase to Rs. 39,817 per month, placing an additional Rs. 4,200 in taxes on each household. The party argued that this increase is unbearable for families already struggling under the weight of the economic crisis.
Citing data from the Department of Census and Statistics, the FSP has highlighted that the average monthly household income in Sri Lanka is Rs. 76,414, while monthly expenses amount to Rs. 63,130. It has warned that nearly two-thirds of a family’s monthly spending would now be consumed by taxes, describing this as a severe economic blow to working-class and lower-income groups. The party accused the government of betraying the expectations of the people who placed their trust in the NPP administration.
While the government has defended its decision by claiming that the higher VAT collection is not the result of introducing new taxes, but rather improving tax enforcement, the FSP dismissed this argument as misleading. It pointed to the Ministry of Finance’s own report, which stated that between 2023 and 2024, businesses collected Rs. 333.1 billion in taxes from consumers but failed to remit them to the state. Despite this massive tax evasion by corporations, the 2025 Budget does not prioritise recovering these unpaid revenues or strengthening direct taxation on high-income earners. Instead, the government has doubled the withholding tax on savings from 5% to 10%, imposed a 15% tax on foreign income earned through online services, and extended import duties on 63 essential goods, including food items, from 1 January 2025.
The FSP also criticised the government’s handling of VAT rates, which have been rising continuously since 2022. The VAT rate, which was 8% in early 2022, was increased to 12% in August 2022, then raised to 15% in January 2023, and further increased to 18% in January 2024. The party warned that the government appears to be following a pattern of gradually increasing VAT, making it even more difficult for ordinary people to afford basic goods and services. Additionally, a Social Security Contribution Tax was introduced in 2023, further exacerbating financial pressures on the public.
Beyond the tax hikes on ordinary citizens, the FSP condemned the favourable treatment given to wealthy individuals and large corporations. It cited a Parliamentary Committee on Public Accounts (COPA) report from March 2024, which revealed that large corporations evaded Rs. 1,068 billion in taxes, while domestic and foreign corporate entities received tax concessions worth Rs. 978 billion. Despite these staggering figures, the government has only planned to increase direct tax revenue by Rs. 141 billion, indicating that it has no real intention of recovering unpaid taxes from the country’s largest businesses.
The FSP also highlighted a controversial clause in the 2025 Budget that offers a six-month amnesty period for overdue tax payments. This clause, buried in the technical section (Clause 1.9) of the budget document—which was only released in English—states that businesses that failed to pay taxes between 2022 and 2023 can settle their dues without facing penalties or interest charges. The party described this as a shameful giveaway to tax-evading corporations, arguing that it directly undermines the government’s claims of enforcing tax compliance.
In its letter to MPs, the FSP urged lawmakers to reject the tax policy and stand against what it called a blatant betrayal of the public interest. The party reminded Parliamentarians that Sri Lanka’s economic crisis, IMF-imposed financial restructuring, and rising inflation have already pushed millions into financial hardship, and that imposing additional tax burdens on struggling families would only deepen the crisis.
The FSP warned that if MPs vote to approve these unfair tax measures, they risk facing public outrage and a loss of trust. It called for an immediate revision of the 2025 Budget’s tax policy, urging the government to shift the tax burden away from ordinary citizens and onto the country’s wealthiest individuals and corporations.
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Govt. urged to halt ‘illegal’ presidential pardons
By Shamindra Ferdinando
The government is coming under pressure from civil society organisations to formulate a clear ‘mechanism’ to deal with requests for presidential pardons.
Representing civil society organisations, Gamini Viyangoda yesterday flayed the NPP government for the delay in taking action against Ven. Galagoda Aththe Gnanasara Thera, after the Supreme Court declared the 2019 presidential pardon granted to him by President Maithripala Sirisena null and void. He said successive Presidents had abused their executive power to release convicted persons from prison.
Purawesi Balaya activist Viyangoda pointed out that the Supreme Court ruled that President Sirisena had acted arbitrarily and failed to independently consider the relevant materials before exercising his executive power.
The Court of Appeal, in August 2018, sentenced Gnanasara Thera, General Secretary of the Bodu Bala Sena (BBS), to six years rigorous imprisonment for contempt of court over his conduct during proceedings concerning missing journalist Prageeth Ekneligoda. Viyangoda said that those who had been affected by the monk’s conduct have the right to know on what basis the President released him, in May 2019.
The Court of Appeal yesterday (05) ordered the relevant authorities to enforce the remaining period of imprisonment imposed on the Thera.
Gnanasara Thera, who had been subject to an open warrant for his arrest, was produced before the Court of Appeal, today, by prison officials.
Having considered the submissions made before it, the Court of Appeal directed the Commissioner General of Prisons to take the necessary steps to enforce the remaining period of the sentence imposed on Gnanasara Thera. Police on Saturday (03) apprehended the monk at a forest monastery in Kalutara. The Colombo Magistrate’s Court on Sunday (04) ordered the Thera to be remanded in custody till Monday.
Appearing for Gnanasara Thera, Attorney-at-Law Iresh Seneviratne, together with Attorney-at-Law Pasan Karunaratne, told the court yesterday that his client had been experiencing severe mental distress and had therefore gone to an ‘Aranya Senasanaya’, where he had been staying.
Viyangoda said that examination of presidential pardons, executed over the years, would reveal how successive leaders exploited the executive power to appease their own. Responding to The Island queries, Viyangoda said that Sirisena, in Sept. 2019, just two months before the presidential election, granted Jude Shramantha Jayamaha a Presidential pardon.
Jude Shramantha Jayamaha was sentenced to 12 years by the High Court, but the Court of Appeal revised that sentence to death, in July 2012, which the Supreme Court later upheld. Viyangoda said that though the Supreme Court, in June 2024, declared that the particular Presidential action was illegal and arbitrary, law enoforcement authorities were yet to take tangible measures to enforce the court directive.
Viyangoda stressed that no President should exercise the right to pardon a convicted on his or her own without following laid out procedures. According to him, Sirisena appeared to have simply ordered the monk, and the convicted murderer, released in response to appeals received by him. A comprehensive investigation could identify those who had been involved in these wrongdoings.
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GL urges cautious handling of Saudi death row case, blasts govt. over BRICS affair
Convenor of Janathawadi Joint Opposition, Prof. G. L. Peiris, yesterday (05) emphasised the responsibility on the part of the government and others to act cautiously when making representations in respect of Sivarasa Anojan facing death sentence in Saudi Arabia over a controversial social media post.
Addressing the media at former President Ranil Wickremesinghe’s Flower Road Office, Prof. Peiris emphasised that whatever representations should be made through the Foreign Ministry.
The one-time External Affairs Minister warned of dire consequences of political party leaders, members of Parliament and civil society making direct representations and trying to get in touch with various Saudi authorities over the phone.
Prof. Peiris said that those who intervened on behalf of Anojan should keep in mind that Sri Lanka should be mindful of the Saudi way of governance and sensitivities.
The former Minister questioned the circumstances Sri Lanka was left out of the recent BRICS summit held in New Delhi. He recalled how former President Wickremesinghe discussed Sri Lanka’s entry into BRICS with Russian President Putin and received an invitation for the Summit there but as a result of the change of government, in Sept. 2024, Sri Lanka ignored that invitation.
That resulted in Sri Lanka being left out from the New Delhi summit, Prof. Peris said.
Prof. Peiris pointed out the absurdity in sending the Foreign Secretary to the BRICS Summit in Russia instead of the President, PM or the Foreign Minister to represent the country.
Referring to the forthcoming conclusion of the current IMF programme, initiated during Wickremesinghe’s time, Prof. Peiris said that Sri Lanka lost a great opportunity to benefit from BRICS by failing to represent the country at a higher level at the Russian summit.
The BRICS nations established the New Development Bank (NDB), originally called the BRICS Development Bank, Prof. Peiris said.
Dismissing NPP government’s explanation regarding Iranian ships awaiting necessary supplies but deprived by US imposed restrictions, the former Minister strongly criticised the administration’s response. According to him, this government responded in a similar manner when the US sank an unarmed Iranian frigate just outside Sri Lankan territorial waters in March this year.
Prof. Peiris declared that the government’s assertion that the US restrictions weren’t only directed at Sri Lanka but all Iranian vessels in other regions as well was not acceptable (SF)
News
Shiranthi files anticipatory bail application
Former First Lady Shiranthi Rajapaksa, who is in Singapore, has filed an anticipatory bail application before the Maligakanda Magistrate’s Court, seeking an order preventing her arrest in connection with an ongoing investigation into the financial affairs of the Siriliya Saviya organisation.
The former First Lady left for Singapore on 16 Sept., and the police handed her a notice at the airport, directing her to appear before the Financial Crimes Investigation Division (FCID).
Attorney-at-Law Jayabalan has filed the petition, naming the Director of the Criminal Investigation Department as the respondent.
The petition states that Shiranthi Rajapaksa is currently overseas receiving medical treatment and fears that she may be arrested at the airport upon her return to Sri Lanka.
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