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SL’s debt crisis has aggravated due to fear of taxing the super-rich says LSSP leader

Published

6 years ago

2020/09/9

The fear of taxing the super rich has worsened Sri Lanka’s debt crisis, says SLPP MP Prof. Tissa Vitarana, leader of the Lanka Sama Samaja Party (LSSP).

Speaking in Parliament during the recent Vote on Account debate, Prof. Vitarana said he was glad that speakers from both sides of the House appeared, at least now, to accept that the country was faced with a severe economic crisis. This did not seem to be the case when promises were being made during the recent General Election campaign. But now when the money has to be found to fulfill the promises made, both sides of the House came out with the same solution, more and more loans, i.e. both local and foreign borrowing, the MP said.

“This is inadvisable as it would deepen the debt crisis facing the country and the people”, he cautioned.

Now, and in the November Budget, Prof. Vitarana called for a different approach to obtain the money the country requires. Wasteful expenditure, both local and foreign, should be minimized. In order to cut Sri Lanka’s foreign debt, instead of increasing it, strict import restriction together with increased export earnings is essential to achieve a positive trade balance. But the latter would take time as it requires proper planning, full mobilization of all the required resources and firm committed action based on science and technology by the government.

As the former Minister of Science and Technology, having established 263 Vidatha resource centres at divisional level across the country and helped to produce over 12,300 micro, small and medium entrepreneurs (17 exporters and 64 suppliers to the food chains and 57 to hotels – refer IPS report), Prof. Vitarana said that he would have liked to make a contribution when the country is facing a difficult time. However, it would appear that there are more capable people available.

“I wish them all success in the national interest. In the interim, less reliable short-term funding solutions, like tourism and repatriated incomes are being promoted, but alas they too have fallen and will take time to revive in the context of the deepening global crisis of capitalism aggravated by Covid-19”, he noted.

Internally, as the Treasury is averse to deficit financing, taking money from the Central Bank, for fear of inflation etc., other ways have to be found to increase government revenue. Rather than taking more loans and getting deeper into debt, Prof. Vitarana suggested that the government should raise the required money by increasing the tax on the super-rich. This was the way out of the debt crisis for the country and the government and the next logical step now that the government has returned to the correct policy of developing the national economy by reducing, and where possible banning, the import of foreign goods.

This was done when Dr. N. M. Perera was the Finance Minister in the SLFP/LSSP/CP Coalition Government led by Mrs. Sirimavo Bandaranaike after it came to power in 1970, the MP recalled.

In Sri Lanka, the upper limit of direct taxation on individuals, mainly the super-rich is one of the lowest in the world, a mere 18%, while the average in Europe is around 45%. In some Scandinavian countries that provide their citizens with a welfare state, the money required is obtained through a higher direct tax with an upper limit of about 60%, which targets the super-rich, he said.

When faced with the severe triple crisis (debt, oil and food) Dr. N. M. Perera as the then Finance Minister in 1970 enabled the country, when faced with a severe global food scarcity, to avoid the deaths of thousands due to starvation, unlike in most other Third World countries, by raising the upper limit of direct taxation to 75%. The funds generated enabled him to provide a measure of rice free and all essentials at low prices through the excellent cooperative outlets, Prof. Vitarana further said.

He was able to not only to balance the Budget but also to produce a budget surplus. This enabled him to cut foreign loans and get the country out of the debt trap. Not only was the foreign debt reduced to the lowest level in the country’s history, he also achieved the economic stability that was required for development, Prof. Vitarana further recalled.

The IMF promotes indirect taxation, like VAT, as the main source of government revenue and in the recent past, 87% of tax revenue was obtained this way. Only 13% was obtained through indirect taxation, and as the upper limit was lowered to 18%, the class of the super-rich (a mere 1% who some estimate as having 30% of the total personal wealth in the country) were practically unaffected and did not contribute their share to the burden, he said.

At this time of crisis, Prof. Vitarana proposed that the government should increase the upper limit of direct taxation to 70% so that while the required funds are obtained, the import of luxuries and non-essentials would drop. It would also narrow the huge gap between the super-rich and the poor, which not only has a bad psychological demonstration affect, but also leads to more crime and social instability. Globally economists have warned of this danger, he added.

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Govt. assures UN of readiness to introduce ‘vetting process’ for troops on overseas missions

Published

11 hours ago

2026/04/28

Sahan Weerasooriya

Thuyakontha

Defence Secretary (retd.) Air Marshal Sampath Thuyakontha has discussed with UN officials in New York the deployment of Sri Lankan troops in Haiti, under a new UN authorised force, tasked with tackling heavily armed gangs operating in the violence ravaged country.

The UN is in the process of building up a force comprising approximately 5,500 officers and men for deployment in Haiti.

The Sri Lankan delegation included Sri Lanka’s Permanent Representative to the UN, former Chief Justice Jayantha Jayasuriya. The UN has tagged the deployment Gang Suppression Force (GSF).

According to the Defence Ministry, Sri Lanka negotiated a Memorandum of Understanding (MoU) regarding the GSF. Although Sri Lanka has contributed to UN-led missions, the proposed deployment differed due to the nature of the operation, sources told The Island.

The delegation has assured that all personnel, assigned for UN missions, including the proposed GSF deployment in Haiti, would be subjected to a comprehensive screening process, in line with UN standards. War-winning Sri Lanka has declared, in New York, that the country was in the process of developing, what the Defence Ministry here called, National Human Rights Vetting Mechanism in consultation with the UN Resident Coordinator in Colombo.

The US has backed the deployment of Sri Lankan troops under UN command. Various interested parties, over the years, protested against the deployment of Sri Lankan troops on the basis of unsubstantiated war crimes allegations.

Thuyakontha has assured that troops would maintain highest standards of discipline during overseas missions. Sri Lanka brought the war here to a successful conclusion in May 2009 against predictions of contrary outcome by so-called experts.

The US and Panama proposed the GSF to replace a Kenya-led multinational force undermined by a lack of funding. Its strength hovered around 1,000, rather than the desired 2,500. The U.N. Security Council authorised the 5,500 strong force on September 30, 2025, with the new power to arrest gang members.

By Shamindra Ferdinando

News

Lawyers cannot be denied right to represent a suspect – Udaya

Published

11 hours ago

2026/04/28

Sahan Weerasooriya

Sallay

Sallay’s case:

Attorney-at-law Udaya Gammanpila yesterday (27) said a lawyer could not be deprived of his or her right to represent a client.

The former Minister and leader of Pivuthuru Hela Urumaya (PHU) Gammanpila said so addressing the media at the party headoffice at Pita Kotte. Gammanpila was responding to recent media reports that he had been prohibited from representing retired State Intelligence Service (SIS) Chief Maj. Gen. Suresh Sallay. Therefore, there was absolutely no basis for claims that he had been barred from meeting the retired officer, now named the third suspect in the Easter Sunday case, the ex-parliamentarian said.

Gammanpila emphasised that in terms of the Constitution a suspect’s right to be represented by a lawyer was recognised as a fundamental right. The Criminal procedure Code, too, guaranteed the suspect’s right to consult a lawyer, the ex-lawmaker said, pointing out that the Judicial Organisation Act underscored the same.

Declaring that the retired officer’s wife had named him as Sallay’s lawyer in a letter addressed to Director, CID, Gammanpila said that the courts, police and the Attorney General’s Department couldn’t under any circumstances interfere with his right to represent Sallay.

The CID arrested Sallay on 25 February and detained him under Prevention of Terrorism Act (PTA) for a period of 90 days. Sallay has filed a writ petition before the Court of Appeal through his lawyers, challenging his arrest and detention by the CID under the PTA.

Former Minister Gammanpila said that even if a Magistrate had the power to prohibit a lawyer from representing a particular suspect, such a course of action couldn’t be resorted to without giving the lawyer concern an opportunity to explain his/her actions.

Declaring that in case of misconduct on the part of a lawyer only the Supreme Court could take disciplinary action, the PHU leader said, adding that he sought a certified copy of the proceedings of the day when a section of the media reported the Magistrate’s declaration of the purported ban. Gammapila said that he was really keen to know what happened during the proceedings on that day.

Sallay served as Director, Directorate of Military Intelligence (DMI) from 2012 to 2016 and received the appointment as head of SIS following the 2019 presidential election. Sallay held that appointment till early October, 2024.

Gammanpila said that he couldn’t be barred for speaking to the media after meeting Sallay, currently held under PTA, or for authoring a book on the 2019 Easter Sunday carnage. According to Gammanpila as long as the suspect had no objections to his lawyer sharing some information with the media it shouldn’t be an issue for Additional Solicitor General Dileepa Peiris.

By Shamindra Ferdinando

News

Police seek Interpol help to probe monks nabbed with narcotics at BIA

Published

11 hours ago

2026/04/28

Sahan Weerasooriya

Police investigating the thwarted a bid made by 22 Buddhist monks to smuggle in narcotics, with a street value of Rs 660 mn via BIA, from Thailand, over the weekend, believe the monks who organised the clandestine operation had sent groups of monks to Thailand before.

Sources said that they had brought in narcotics on earlier occasions.

Police have seized the mobile phones used by the suspects and sought INTERPOL assistance.

Earlier, the Negombo Magistrate’s Court remanded those 22 monks, arrested in connection with the largest drug bust in the airport’s history.

The monks were produced before the Negombo Magistrate’s Court and ordered to be held in custody until 02 May, as investigations continue into the alleged smuggling operation and any wider networks involved.

However, other sources said that more than 110 kilogrammes of suspected Kush and Hashish, with an estimated street value exceeding Rs 1.1 billion, had been found, concealed in false-bottoms of their suitcases. The bags reportedly packed with school supplies and sweets are said to have contained over five kilogrammes of narcotics per individual.

The arrests followed a raid by the Police Narcotics Bureau on Saturday night. Investigators have also recovered mobile phone evidence indicating that the group had travelled to Bangkok on 22 April using airline tickets allegedly given by a sponsor. Authorities allege that the suspects were photographed in civilian clothing, while overseas, engaging in activities deemed suspicious.

Police say this marks the first reported instance of a large-scale narcotics operation via the airport involving Buddhist monks. The suspects are young monks from different parts of the country.

By Norman Palihawadana