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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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Construction of Jet A-1 Aviation fuel pipeline and new oil tank complex at Muthurajawela begins under President’s patronage

Published

6 hours ago

2026/10/4

Priyan

President Anura Kumara Dissanayake said that the Government’s objective is to maintain a strong state presence in the energy market while providing an efficient service to the people, adding that significant progress has been achieved towards this objective over the past two years and that a strong energy market that does not place a burden on the people is now being built in Sri Lanka.

The President made these remarks on Friday (02) morning while attending the commencement of construction of the Jet A-1 pipeline system of the Ceylon Petroleum Corporation (CPC) and two new oil storage tank systems belonging to the CPC and the Ceylon Petroleum Storage Terminal Limited (CPSTL).

The projects are being implemented in line with the Government’s national objective of developing infrastructure in the energy sector, with the aim of ensuring the security of aviation fuel supplies, reducing supply costs and providing the capacity required to meet future demand for aviation fuel.

A dedicated pipeline and associated tank complex are being constructed to connect Muthurajawela with the Bandaranaike International Airport in Katunayake, with the aim of meeting the future demand of the country’s aviation sector, ensuring the security of aviation fuel supplies and reducing transportation costs.

Construction has commenced on five new Jet A-1 fuel storage tanks with a total capacity of 92,000 cubic metres. These comprise two large Jet A-1 tanks, each with a capacity of 30,000 cubic metres; two medium-sized tanks, each with a capacity of 15,000 cubic metres; and an additional tank with a capacity of 2,000 cubic metres. The fuel supply pipeline system will be connected to the airport through a 21-kilometre-long underground pipeline with a diameter of 10 inches from the Muthurajawela tank complex. The project is scheduled for completion within 30 months.

Meanwhile, as part of ongoing efforts to strengthen and expand storage and infrastructure facilities in the petroleum industry, the Ceylon Petroleum Storage Terminal Limited (CPSTL) commenced construction today of three new storage tanks at the Muthurajawela Terminal.

Upon completion, the three-tank system, comprising two tanks with a capacity of 15,000 cubic metres each and one tank with a capacity of 10,000 cubic metres, will provide an additional total storage capacity of 40,000 cubic metres.

This will further enhance the petroleum storage capacity of the terminal and support the continued development of the country’s petroleum infrastructure. The project has a contractual period of 18 months and is scheduled for completion in April 2028.

The tanks are being constructed in compliance with relevant international standards and recognised industry best practices, ensuring enhanced safety, reliability and operational efficiency. The additional storage capacity will strengthen the country’s fuel reserves, improve operational flexibility and support the reliable and uninterrupted distribution of fuel products to meet the country’s growing energy requirements.

Minister of Ports and Civil Aviation and Minister of Energy Anura Karunathilaka said,

“We are now in an era of energy transition. The world is rapidly moving towards the use of clean energy. The use of electric vehicles is very important in this regard, and our country is also now moving in that direction.

The use of solar energy is also important. We expect to add 1,200 megawatts of solar power capacity to the national grid by 2029.

As a country, we must focus not only on controlling fuel prices but also on controlling fuel consumption. The public also has a major responsibility in this regard.

It is particularly important to change our patterns of energy consumption. Greater energy security can be achieved by avoiding periods of high energy demand, shifting towards electricity use and using fuel-efficient vehicles, particularly electric vehicles.”

Chairman of the Ceylon Petroleum Corporation D. J. Rajakaruna said,

“We faced a major challenge due to the war in the Middle East. However, with the intervention of the President, relief was provided to the people and the situation was managed very effectively.

As a result, while diesel prices in the global market increased by 91%, the increase in Sri Lanka was only around 39.5%. While petrol prices in the global market increased by 80%, the increase in Sri Lanka was only around 41%.

Despite providing fuel at lower prices in this manner, the Corporation has recorded a profit of Rs. 28 billion this year. We also recorded a profit of Rs. 36 billion last year.

This may raise the question of why fuel prices are not being reduced when there are such profits.

However, we have used those profits to commence a number of infrastructure development projects at the institution.

These include adding the capacity of 11 tanks, including the construction of six tanks that had previously been abandoned, to increase fuel storage capacity; modernising our oil-filling section, which is more than 90 years old, and establishing a gantry system similar to that at Muthurajawela; laying two new pipelines for unloading fuel from the port to Kolonnawa; constructing a new pipeline to transport Jet A-1 fuel to Katunayake; and upgrading the pipeline system and laying new pipelines, among many other projects.

We are implementing these projects using those profits. Therefore, we have returned the benefits to the people through these investments.”

The Minister of Science and Technology, Professor Chrishantha Abeysena; Deputy Minister of Energy, Arkam Ilyas; Member of Parliament Kumara Jayakody; Secretary to the Ministry of Energy and Senior Additional Secretary to the President, Russell Aponso; foreign ambassadors; government officials including officials of the Ministry of Energy and the Ceylon Petroleum Corporation; and representatives of Sinopec were among those present at the occasion.

President’s Media Division (PMD)

News

Lanka enters new phase of prosecutions as hurdles clear

Published

16 hours ago

2026/10/4

Thilina Walpola

MONETABRIEF –The prosecution of high-profile individuals from the former Rajapaksa administrations is set to escalate this month with the clearing of legal hurdles and administrative bottlenecks, according to officials involved in the process.

Former president Gotabaya Rajapaksa’s attempt to secure an order preventing his arrest in connection with the Easter Sunday massacre was turned down by the Court of Appeal on Thursday.

An overseas travel ban has been in operation against Rajapaksa since June, but the Criminal Investigations Department made no move to question him. He instead filed a writ application seeking an order preventing his possible arrest.

President of the Court of Appeal Rohantha Abeysuriya noted that the court would not interfere with the investigative process. Any attempt by the court would amount to an obstruction of the investigation.

In an unrelated case, the same court rejected an application by opposition legislator Dilith Jayaweera seeking the quashing of a contempt charge filed against him by the Fort magistrate. The charges against Jayaweera and a few other opposition politicians are expected to be taken up in the coming week.

Jayaweera and other opposition politicians — Wimal Weerawansa, Udaya Gammanpila, Sugeeshwara Bandara, and Asanka Navaratne

— were hauled up over their remarks relating to the arrest of Suresh Sallay, the former head of the State Intelligence Service.

SLPP academic Mahinda Pathirana is also charged over his public comments about Sallay’s arrest in February under the draconian Prevention of Terrorism Act.

Former president Mahinda Rajapaksa’s son, legislator Namal Rajapaksa, is already in remand custody following his arrest in connection with three cases of bribery and money laundering relating to the 2013 Airbus deal and the Krrish property development in Colombo.

Although Namal has been granted bail in the Airbus money laundering charge, he is in custody until October 13 over the bribery charge relating to the same Airbus transaction. His arrest is under a provision of the Anti-Corruption Act that does not allow a magistrate to grant bail unless under exceptional circumstances.

Meanwhile, his mother Shiranthi Rajapaksa, who had been asked to report to the Financial Crimes Investigations Division on September 24, was a no-show and was yet to return from Singapore.

She had travelled overseas on September 16, and a family spokesman said she was handed the FCID summons at the departure lounge of Bandaranaike International Airport just before she boarded a flight to Singapore.

At the time, the family spokesman said she was due to return in three days.

“We will see greater momentum in the legacy cases in the coming weeks,” an official involved in the prosecutions said.

“We have cleared the legal hurdles to press ahead with more arrests,” he said.

“We are working on a few administrative issues which will be resolved very soon.”

The controversial prosecution of former President Ranil Wickremesinghe is dragging on without him being formally indicted since his arrest in August last year. The Fort magistrate has listed the case again for November 11, when the Attorney-General is expected to report on his decision regarding action against Wickremesinghe.

News

Police warn: Court evaders face property seizure

Published

16 hours ago

2026/10/4

Thilina Walpola

Police have reminded the public that courts have the power to take legal action against individuals who evade arrest or remain in hiding after warrants have been issued against them.

Police said that under Section 60 of the Code of Criminal Procedure Act No. 15 of 1979, a court could issue a written proclamation requiring a person evading arrest under a warrant to appear at a specified place and time.

The proclamation must allow the person at least 30 days to appear before court, Police said.

If the person fails to appear even after the proclamation has been issued, the court may take further action under Section 61 of the Act.

This includes issuing an order for the attachment of the movable or immovable property belonging to the person concerned.Police issued the reminder highlighting the legal measures available against persons who deliberately evade arrest and remain in hiding after warrants have been issued.