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Editorial

Long haul ahead

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In this hi-tech era nobody will dispute the fact that computers eliminate manual drudgery, doing in seconds, or nanoseconds what humans would take hours, days, weeks and even months to perform. It is therefore no cause for surprise that the Inland Revenue Department (IRD), responsible for collecting a large share of state revenue, decided to computerize. Better late than never, it can be said. The tax authorities some years ago bought an expensive Revenue Administration Management Information System (RAMIS) which was touted as something that would revolutionize tax administration in the country. It has been used since the beginning of 2017 and according to tax officials has proved more efficient than manual handling. Maybe so, but numerous problems have arisen as a result of the new system. Many taxpayers and accountancy firms handling tax matters for clients hold a different view on RAMIS performance and are constantly complaining of harassment and innumerable difficulties arising in their dealings with IRD post-RAMIS.

However that be, it has been revealed at the Committee on Public Accounts (COPA) an oversight body of the legislature, that though over a massive three billion rupees had been paid to a Singaporean company that developed the system, each time an amendment to the tax law is made – and these are frequent – a further four billion must be coughed out to incorporate it in the system. We do not know how much additional expenditure has been incurred in this regard since the system was first purchased and commissioned. The sensible suggestion has been made by a member of COPA that an agreement must be reached with the supplier/developer of the system on a one off payment basis for incorporating amendments to the tax law into RAMIS. That, of course, is commonsense. But whether such an agreement will be possible is something that remains to be seen. Selling a product cheap and thereafter making your money on essential spares and maintenance is not an uncommon business practice. Whoever was responsible for the purchase of the system, and there would have been many involved in such a costly procurement, should have foreseen the necessity of amendments to the tax law having to be accommodated in RAMIS and provided for this initially.

Treasury and Finance Secretary R.S. Attygalle has told COPA that a five-year, consistent tax policy has been proposed (promised?) in the 2021 budget. This would be a convenience for both taxpayers and tax collectors, he has said. Similar promises of a consistent tax policy have been made in the past too, but delivery has been painfully slow. According to data presented to COPA, 532 of the country’s 2,192 big taxpayers account for 70.2 percent of tax revenues. Collection from cash cows such as the highly taxed alcohol and tobacco industries will be relatively easy. But not so from the illicit liquor segment supplying much of the booze consumed nationally. Whether the bookies and casino operators pay their proper taxes are also matters that must be determined. It is very well known that tax evasion is rampant in the country and IRD’s performance in rounding up such evaders has been less than satisfactory with increased collections usually coming from existing files. There have been complaints over the years that the practice of trying to squeeze already squeezed lemons continues to be common practice at the tax office. While fictitious returns and attempted tax frauds cannot be condoned and must be diligently pursued, the taxman should be considerate to honest taxpayers and not load them with unnecessary queries and paperwork.

We run a story from our parliamentary reporter today about a Rs. 1.3 trillion deficit in the government’s tax revenue in 2018. This is before the Easter bomb or the Covid pandemic which necessarily impacted on State revenue. The situation must necessarily be worse since then. Officials have attributed much of the shortfall to many state institutions defaulting on their tax obligations. This is often because they are not in a position to make these payments according to independent assessments, COPA has been told. A full report on such institutions has been called for but whether this will yield the desired result is doubtful. The tax man can force a defaulting company into liquidation but not so government bodies. Apart from not meeting tax obligations, state undertakings are guilty of routinely failing in paying their suppliers. Thus there is a running debt most of the time from SriLankan Airlines to the Ceylon Petroleum Corporation which usually carries massive overdues from bodies such as the CEB. While an ordinary householder falling back on paying his domestic electricity or water bill risks disconnection, not so government institutions.

The Covid induced economic downturn will remain with us for a long time despite the many sunshine stories commonly spun on quick recovery. We are given different time frames by various concerned authorities on when such recovery is to be expected. But none of them are in a position to accurately predict when the pandemic will be brought under control. Even when that happy day dawns, return to normalcy will be hard and painful. Some businesses are limping on, but there are many others unable to do so. The government will have to live with the reality of revenue shortfall for a long time to come. If 2018 was as bad as has been stated, 2019 and 2020 must be necessarily worse. In such a context there must be a conscious effort in cutting the often profligate expenditure of state institutions. This something yet to be seen.



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Editorial

Shirkers as preachers

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There seems to be no end to the JVP-NPP government’s volte-face. The ruling party leaders vehemently opposed Emergency regulations while out of power, launching into tirades against the previous governments for abusing Emergency to further their political interests by suppressing the democratic rights of the Opposition and the public. But they are now practising the very opposite of what they preached; they keep on extending the state of Emergency, which was imposed in the aftermath of the landfall of Cyclone Ditwah, six months ago. It also has no qualms about using the Prevention of Terrorism Act, which it promised to do away with.

The government made a mockery of its much-touted commitment to upholding democracy once again on Thursday (07) by extending the state of Emergency. The Opposition never misses an opportunity to condemn the government for doing so, but most of its members are absent when motions seeking parliamentary approval for extending Emergency are put to the vote.

On Thursday, the motion presented by the government to extend Emergency regulations received 145 votes, with only six Opposition MPs being present in the House to vote against it. Seventy-three MPs, including 13 government members, were absent during the crucial vote. That the ayes would have it was a foregone conclusion, but the Opposition MPs should have remained in the House when a division was called on the motion. Last month 60 MPs, representing both sides of the House, were absent when a vote was taken on Emergency. The MPs’ absence during crucial debates and votes amounts to a dereliction of legislative duty and an abdication of parliamentary responsibility.

The Chief Opposition Whip and party whips are responsible for ensuring that the Opposition MPs are present during debates and votes. They only talk nineteen to the dozen in the House. A wag says it is a case of all sizzle and no steak. Shouldn’t these Opposition bigwigs, given to pontification, put their house in order before lecturing the government on how to conduct its affairs?

Our legislators parade their knowledge of Erskine May’s authoritative work, Parliamentary Practice. They however do not follow the principles enunciated by May in his seminal treatise. May has viewed parliamentary attendance not merely as a procedural obligation but also as an essential condition for representative democracy and effective scrutiny. Reflected in his writings is the traditional Westminster belief that Parliament functions properly only when its members are physically present and actively participate in debates, scrutinise government actions, serve on committees and vote.

May’s emphasis is also on the ethical dimension of the MPs’ attendance during debates. The members are expected to be present during the proceedings, listening to dissenting views and responding to questions. He has frowned on the practice of members departing immediately after delivering their speeches in the House. This is something the Sri Lankan Presidents ought to pay attention to. They have the bad habit of haranguing the MPs and hurrying out of the chamber immediately afterwards. They apparently consider it infra dig to remain in the chamber and listen to the Opposition MPs. In Westminster democracies, influenced by May, parliamentary attendance has come to symbolise political responsibility, discipline and commitment to public service. Sadly, the members of the Sri Lankan Parliament do not seem to care much about this cherished tradition.

A parliamentary sitting reportedly costs about Rs. 32.2 million, and it does not make sense to spend so much money if the MPs skip sittings. Those who do not participate in debates and votes in the House make a strong case, albeit unwittingly, for a smaller Parliament.

If Parliament can manage with about 150-170 members, as it does at present, why should the taxpayers be made to pay through the nose to maintain as many as 225 MPs besides 445 provincial council members (including 45 ministers) and more than 8,500 local councillors. No wonder there is a resurgence of anti-politics.

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Editorial

Fragile ceasefire stuck in chokepoint

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Saturday 9th May, 2026

An exchange of fire between the US and Iran in the Strait of Hormuz sent shockwaves across the world yesterday, and oil prices soared as a result. Thankfully, it was a brief clash. The US has claimed that it foiled Iranian attacks on three of its ships. Iran has said it came under unprovoked attacks. Ceasefires in military conflicts are never free from such shocks, and care needs to be exercised to prevent skirmishes from spiraling out of control. The international community has a pivotal role to play in ensuring that the ceasefire in West Asia lasts, and negotiations continue.

The US-Iran peace negotiations have been stuck in the Hormuz chokepoint, and they will have to progress, leading to a durable truce lest the region should face a protracted conflict. There is nary a country that has not been affected by the West Asia conflict either directly or indirectly.

About 1,500-2,000 ships and 20,000 seafarers are reportedly stranded in and around the Hormuz Strait, and this a very serious issue that the world cannot ignore. The US sought to make a naval intervention to escort commercial vessels through the chokepoint, but subsequently paused its “Project Freedom”, which would have jeopardised the fragile ceasefire.

However, so many ships and their crews must not be kept waiting indefinitely in a sea passage, and international navigation via the Hormuz Strait must resume fast but without any US military intervention, which will only make matters worse.

Many economies are reeling the world over, especially in the Global South, owing to the closure of the Hormuz Strait, through which about 20 percent of global oil supplies and about 30 percent of global fertiliser supplies pass. The impact of the destruction of oil assets in Iran and its neighbours will be felt for decades to come. Even if hostilities cease, it will not be possible to repair the damaged assets any time soon.

The Food and Agriculture Organization of the United Nations (FAO) has repeatedly warned that prolonged disruption of fertiliser shipments through the Strait of Hormuz could trigger serious global food shortages, food inflation and reduced crop yields, as we pointed out in a previous comment. FAO officials have said that the crisis threatens global agrifood systems because up to 30–45% of internationally traded fertilisers and large volumes of energy supplies move through the strait. This alone is proof of the enormity of the problem the conflict has created for the world.

The general consensus is that a way out is to ensure that the ongoing ceasefire and negotiations create conditions for the return of the status quo ante in the Hormuz Strait soon. However, that will be possible only if both the US and Iran soften their stands. Iran has asked the US to end its naval blockade, and this can be considered a fair demand, and if the US complies, Iran will be compelled to reopen the Hormuz chokepoint, paving the way for further de-escalation and helping bring down oil and fertiliser prices. That alone may not help resolve the conflict, which is far more complex than it looks, but the resumption of international navigation through the Hormuz Strait will give a tremendous boost to the peace process, which is said to be in the doldrums, with both sides resorting to brinkmanship.

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Editorial

The Vijay factor

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Friday 8th May, 2026

Pity the land that needs heroes, Brecht has famously said. Some countries have gone to the extent of elevating political greenhorns to positions of power, expecting them to play messianic roles, simply because of their popularity in the tinsel world and adeptness at uttering Goebbelsian lies and making Machiavellian promises.

Tamil Nadu voted overwhelmingly for Vijay (Joseph Vijay) recently. However, his party, the Tamilaga Vettri Kazhagam (TVK) could not secure an outright majority, and his political journey has had a bumpy start. He has been left with no alternative but to resort to political horse trading to form a coalition government. The Congress has reportedly made overtures to the TVK, and a political marriage of convenience is said to be likely.

The problem with most actors-turned-politicians in this region is that they tend to consider real world politics as a mere extension of their celluloid reality, and, worse, act accordingly. True, there are some exceptions, but they only prove the rule.

We could have ignored Vijay’s theatrics and campaign slogans, and considered them problems confined to Tamil Nadu, if not for their implications for Sri Lanka. Vijay obviously lacks experience to navigate complex political and economic issues. Tamil Nadu actors’ stunts in films defy the laws of physics and are hugely entertaining, but they are of no use in the real world vis-à-vis economic and political challenges. Among Vijay’s campaign promises that helped him garner enough popular support to win the recent election are a 2,500-rupee monthly allowance for women heads of households, six free cylinders of LPG a year for families, one sovereign gold ring each for all newborns, a 15,000-rupee education assistance allowance for mothers of schoolchildren, a 4,000-rupee monthly allowance for unemployed graduates, Rs. 5 lakh as new start-up loans, and Rs 25 lakh for biz launch loans. These promises, if ever implemented, will cost Tamil Nadu more than 50% of its annual tax revenue, according to Indian media reports. So, all signs are that most of them will go unfulfilled, and Vijay and TVK will have their work cut out to retain popular support. Trouble for Sri Lanka is bound to begin when they struggle to shore up their approval ratings.

Sri Lanka is the last resort of all failed Tamil Nadu politicians, as it were. Vijay has already called for ‘retrieving’ Katchatheevu. He is emulating his predecessors. He is likely to intensify his Katchatheevu campaign and flog the fishermen’s issue harder when the going gets tough for him so as to divert public attention from burning problems. The BJP will do everything in its power to undermine the TVK and recover lost ground in Tamil Nadu, but Vijay’s interests and those of the BJP overlap where Katchatheevu, the delayed Provincial Council elections, devolution, ethnic issues in Sri Lanka, and illegal fishing are concerned.

The JVP’s India policy has undergone a sea change over the years. Unlike in the past, when it dismissed India’s concerns about Sri Lankan issues as intentions of domination, the JVP is today subservient to India. The JVP-led government will therefore have to address the issues raised by the BJP and the TVK, devolution being prominent among them.

The JVP made short work of one Vijay in the late 1980s, as it considered him an obstacle in its path.It gunned down Vijaya (or Wijaya) Kumaratunga, popularly known as Vijay, because he led the political forces supportive of devolution and the Provincial Council system. About 38 years on, it has another Vijay to contend with, albeit in India, and the issues which it sought to resolve by killing Vijay have not gone away. The JVP-led government is under Indian pressure to implement the 13th Amendment fully and hold the much-delayed PC polls.

There have been various analyses of Vijay’s victory in Tamil Nadu and its implications for Sri Lanka. Some analysts have stressed the need for the JVP-NPP government to view challenges arising from the rise of the TVK as opportunities and strategise to enlist the support of Tamil Nadu as a development partner. This no doubt should be on Sri Lanka’s agenda. However, prudence demands that while being cautiously optimistic, Sri Lanka remain mindful of the possibility of having to deal with a more hostile Tamil Nadu under Vijay’s leadership and find ways and means of dealing with such an eventuality.

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