Things are getting ‘curiouser and curiouser’

The National People’s Power (NPP) government is under intense public scrutiny. The recent appointment of retired Commodore M.B.N.A. Premarathne as new Commissioner General of Exercise drew heavy public condemnation as the media revealed his wife, senior Professor Wasantha Subasinghe, who had been on the NPP National List at the last parliamentary election held in November 2024, recently received appointment as Vice Chancellor of the Gampaha Wickramarachchi University of Indigenous Medicine. Social media erupted with adverse comments on the appointments.

Premarathne succeeded U.L. Udaya Kumara Perera, a Special Grade Officer of the Inland Revenue Service, who retired on 10 July, 2025, having reached the mandatory retirement age of 60. The Excise Department had been placed under a retired military officer.

The public questioned the appointments against the backdrop of severe NPP criticism over the years of nepotism in public sector appointments. She was one of the 13 nominees not lucky enough to get a National List slot. The Parliament consists of 29 nominated and 196 elected members.

The following were the NPP National List nominees: Bimal Niroshan Rathnayake , Dr. Anura Karunathilake, Prof. Upali Pannilage, Eranga Udesh Weerarathna, Aruna Jayasekara, Dr. Harshana Sooriyapperuma, Janitha Ruwan Kodithuwakku, Punya Sri Kumara Jayakody, Ramalingam Chandrasekar, Dr. Najith Indika, Sugath Thilakaratne Lakmali Kanchana Hemachandra, Sunil Kumara Gamage, Gamini Rathnayake, Prof. Ruwan Chaminda Ranasinghe, Sugath Wasantha de Silva Abubakar Adambawa (Digamadulla District candidate), and Ranthnayake Hettige Upali Samarasinghe (Vanni District candidate).

Perhaps Prof. Subasinghe could have been appointed to Parliament through the National List if not for the controversial NPP decision to choose two defeated candidates, namely Abubakar Adambawa and Ranthnayake Hettige Upali Samarasinghe.

The NPP appeared to have conveniently forgotten its own high profile campaign, not only against nepotism in public sector appointments but favoured treatment to retired armed forces officers.

The Opposition is likely to press the NPP government over Premarathne’s appointment. The Excise Department is one of the three main revenue earners for the government. The other institutions are the Inland Revenue and the Sri Lanka Customs. Over the years, its reputation has been badly tarnished by corruption and manipulation at the highest level. During the Wickremesinghe-Rajapaksa administration (July 2022-Sept 2024), the Excise Department received the wrath of the Opposition, including the NPP, for backing Ranil Wickremesinghe’s abortive presidential election bid.

The Parliament has repeatedly found fault with the Inland Revenue, the Sri Lanka Customs and the Excise Department for failing to meet revenue targets. Their failures have been essentially blamed on corruption at all levels. Is Premarathne the best choice for this vital post? Can he meet the challenging task? The Opposition is likely to target the Excise Department as it battles to paint a bleak picture of the developing situation. Having promised transparency and accountability in the run-up to the presidential and parliamentary polls last year, the NPP owes the public a lucid explanation regarding the near simultaneous appointment of the retired Navy officer and his wife to public sector positions.

Social media platforms have given the public a limitless opportunity to vent their anger at the government. Commodore Premaratne’s appointment as Excise chief surprised many, particularly against the NPP’s harsh criticism of the previous administrations of their failure to run revenue earning mechanisms professionally.

The NPP’s accusations against other political parties appeared to have backfired on them.

Role for ex-military

The Rajapaksas were severely criticised for accommodating retired military officers in the public sector at the expense of deserving civilians. Quite a number of diplomatic postings, too, were offered to the ex-military, whereas some serving officers received top appointments.

Following the 2019 presidential election, a section of the media carried lists of ex-military officers holding public sector positions. In fact, both the UNP and the SLFP-led coalitions, as well as the SLPP, treated the ex-military lavishly.

The NPP that fielded Anura Kumara Dissanayake at the 2024 presidential election is led by the JVP. Dissanayake is the leader of both the JVP and the NPP that came into being only in 2019.

Commodore Premarathne’s appointment should be examined against the backdrop of the role played by the retired military officers/personnel grouping in the NPP’s triumph at national elections last year. Throughout the presidential-parliamentary polls campaigns, the retired military grouping played a significant role in transforming public mindset. Emergence of retired Air Vice Marshal Sampath Thuiyakontha, as a key speaker at NPP platform, upset the Wickremesinghe-Rajapaksa government to such an extent that President Wickremeisnghe, in his capacity as the Defence Minister, imposed sanctions on the celebrated helicopter gunship pilot. The Defence Ministry ordered bases not to welcome him. Thuiyakontha hit back hard by seeking the intervention of the Supreme Court to overturn the Defence Ministry decision. The ex-AVM won the battle. The government ended up with egg on its face. Today Thuiyakontha is the Secretary to the Ministry of Defence. Who could have anticipated the JVP/NPP picking a war veteran to receive the appointment as Secretary Defence and the unceremonious scrapping of the Chief of Defence Staff (CDS) post?

The NPP also brought in retired Maj. Gen. Aruna Jayasekera, who had also been a speaker on its political platforms, as the Deputy Minister of Defence. The Opposition never expected two senior retired military officers at such crucial positions in a JVP/NPP government, especially against the backdrop of the ruling party being at the receiving end of two bloody military crackdowns directed at them in 1971 and 1987-1990. Having launched two insurrections, the JVP suffered at the hands of the military like no other political party. The military, police and paramilitary groups, formed by the UNP, eradicated the top JVP leadership leaving only Somawansa Amarasinghe, who survived by the skin of his teeth by escaping to India on a boat before the military/government death squads could get their hands on him. He, too, could have been eliminated if not for the timely intervention of the Indian authorities who carried out a clandestine operation to remove him. Did some influential section of the then UNP facilitate the operation is a question that has never been honestly answered?

The NPP has indicated in no uncertain terms that whatever it campaigned for during national elections those who served its interests during difficult times would be looked after. In fact, those who threw their weight behind the NPP, at the onset of the Aragalaya that forced President Gotabaya Rajapaksa out of office, should be appreciated from the point of view of the NPP. The writer doesn’t see any wrong in that reasoning. The appointment of Rear Admiral (retd.) Fred Seneviratne, as Sri Lanka’s High Commissioner to Pakistan, is a case in point. Seneviratne had been among those ex-senior military officers on NPP political platforms. Seneviratne, VSV, USP, psc, MSc (DS) assumed duties at the Sri Lanka High Commission, in Islamabad, on Thursday, 26 June, 2025.

For a long time, the top envoy’s position in Pakistan has been largely reserved for a retired military officer, regardless of the political party in power. There is no exception during the conflict that ended in 2009 and after. Pakistan is one of the few countries that backed the war against separatist Tamil terrorists.

The first post-Aragalaya parliamentary election paved the way for ex-military men to enter Parliament on the NPP ticket. Lieutenant Commander Prageeth Madhuranga (Gampaha) and Maj. Gen. G.D. Sooriyabandara (Kurunegala) were among the elected NPP members of its 159-member parliamentary group. Before the Aragalaya, the JVP/NPP fielding any ex-military officers at parliamentary elections sounded unreal. But Aragalaya has turned Sri Lanka politics upside down and the overall political environment changed to such an extent, the Rajapaksas had quite clearly lost the monopoly in fielding ex-military types at elections.

Controversial moves

The JVP/NPP lambasted the Rajapaksas bandyism and favouring close associates. The Rajapaksa family did that on an industrial scale. There was absolutely no limit to such political appointments. In fact, that had been one major campaign slogan against them at national elections in 2010, 2015, 2019, 2020 and 2024. However, the NPP, having been critical of nepotism, had no qualms in fielding Bimal Rathnayake’s wife Samanmalee Gunasinghe, a member of the JVP Central Committee from the Colombo district. While Bimal Rathnayake entered Parliament as the NPP’s first nominated member, Samanmalee Gunasinghe was elected. Now the Rathnayake duo represent the current Parliament.

The NPP’s General Secretary Dr. Nihal Abeysinghe and his son Chathuranga successfully contested Kalutara and Colombo districts, respectively, at the last parliamentary elections.

Political parties, representing the Opposition, cannot protest at such moves as they, right throughout parliamentary politics, practiced nepotism. However, the public can question such duplicitous conduct, especially through social media from those who cried hoarse about bringing a system change, but are now doing the exact same wrongs, albeit little by little. So folks don’t be surprised if it becomes an avalanche before long.

At the onset of AKD presidency, controversy erupted when he picked close friend and a contemporary at the Kelaniya University Nandika Sanath Kumanayake as Secretary to the President. Some questioned Kumanayake’s capacity to handle high pressure assignments though he had served as a Deputy Director of Customs. Of course President Dissanayake cannot be faulted for choosing a person he trusted.

Subsequently, the NPP drew fire when SSP Shanie Abeysekera and Senior DIG Ravi Seneviratne had been brought back from retirement with the intention of launching an all-out offensive, targeting those the government alleged were responsible for the 2019 Easter Sunday carnage. Now the continuing controversy over their appointments has taken a new turn with Leader of the House Bimal Rathnayake’s recent declaration that the two top ex-cops were taken back at the request of the Catholic Church. Rathnayake, without hesitation, named Archbishop of Colombo Malcolm Cardinal Ranjith as the prime mover in bringing back Messrs Abeysekera and Seneviratne.

Obviously there is no big mystery for the duo to crack as far as the Easter carnage is concerned, where outside forces hoodwinked local Muslim fanatics to carry out the dastardly acts by making them believe they were doing it for Al Qaeda.

The Catholic Church hasn’t contradicted the responsible NPPer’s declaration. Therefore, the Church’s intervention in making key appointments -Abeysekera as Director CID and Seneviratne as Secretary to the Ministry of Public Security Ministry – will now stick.

The recent dispute over the NPP move to appoint Pushpitha Chandana Hewa Kondilage as the Auditor General underscored the responsibility on the part of all concerned to adopt an open procedure. The move to bring in Kondilage now on the CPC Board of Directors, as the AG, drew widespread condemnation. They pushed for the formalisation of the appointment of Dharmapala Gammanpila, the Acting AG, with three decades of experience in the field.

The Committee on High Posts, chaired by Premier Dr. Harini Amarasuriya, granted approval for the appointment of retired Air Force Commander, Air Chief Marshal R.A.U.P. Rajapaksa, as the Sri Lanka High Commissioner to the Republic of South Africa.

The appointment of former Chief Justice Jayantha Jayasuriya, PC, as Sri Lanka’s Permanent Representative to the United Nations, in New York, Nimal Senadheera, a former Sri Lanka Administrative Service (SLAS) officer, currently pursuing a PhD in Scotland, as the High Commissioner to the United Kingdom, Prof. Janaka Kumarasinghe as Ambassador to Japan, and Prof. Arusha Cooray as Ambassador to the United Arab Emirates (UAE), proved that the NPP will pursue its agenda, regardless of criticism. The government has simply ignored the protests by the Sri Lanka Foreign Service Association in this regard.

Speaker challenged

An issue that failed to attract sufficient media attention is the complaint lodged by Nawa Jathika Peramuna with the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) recently against Speaker Dr. Jagath Wickramaratne.

The complaint filed in terms of the Public Property Act and 2023 Anti-Corruption Act may not have received media attention at all if not for a hastily prepared press release issued by the Parliament. The move made by Nawa Jathika Peramuna is stimulating as its leader Sugeeshwara Bandara was the Private Secretary to the seventh executive President Gotabaya Rajapaksa.

Having backed Ranil

Wickremesinghe’s candidature at the 2024 presidential election, Sugeeswara Bandara’s move, is politically motivated and meant to humiliate the NPP. But, the political activist may find himself in hot water if unable to substantiate accusations directed at the Speaker and Parliament.

The bone of contention is whether the incumbent Speaker used an additional vehicle more than the two vehicles as stipulated, the use of a government housing unit other than the Speaker’s official residence and the favoured status granted to a member of his personal staff. The Parliament assured us that the Speaker’s personal staff comprised eight of whom four received a vehicle each and fuel allowance in terms of the relevant circulars. Nawa Janatha Peramuna insisted that according to information available, personal staff consisted of 15. Let CIABOC investigate and verify charges levelled by Bandara. If the former personal staffer of Gotabaya Rajapaksa is wrong, he must be prepared to face the consequences.

Parliament has completely contradicted Bandara’s claim pertaining to the conduct of the Speaker, whereas the activist posed a set of questions numbering 10 to the Parliament.

There had never been a previous instance of a Speaker being accused of corruption. The statement issued by Parliament, dated 06 July, disclosed that the incumbent Speaker on his own, this year, restricted the amount of litres of fuel he is entitled for to 900 litres, whereas previous Speakers drew unlimited quantities of fuel.

The previous and the NPP government’s first Speaker, Asoka Ranwala, had to leave his post under rather questionable circumstances as he could not confirm his claimed doctorate.

Bandara asked whether the Speaker received 900 litres of fuel in addition to the fuel allowance he received along with his monthly salary.

CIABOC will have to verify the high profile accusations. The Parliament cannot, under any circumstances, act in a manner that generated suspicions among the public as the country experienced extreme difficulties due to the continuing economic crisis. The decision on the part of the Speaker and Parliament to issue a statement contradicting accusations highlighted the gravity of the developing situation.

Interestingly, it was announced, last week, that the Speaker wants to convert his official residence into a knowledge hub for all elected public representatives from lowly local bodies to Parliament.

The NPP is struggling to maintain its public posture amidst various issues. The ruling party has succumbed to political pressures to such an extent, it ended up forging alliances with those who had been once called corrupt. Public responded with disbelief when the NPP reached consensus with those who had been previously accused of waste, corruption and irregularities teamed up with the NPP to form Local Government administrations. Norwood Pradeshiya Sabha is a case in point.

The Opposition will find it difficult to challenge the NPP in or outside Parliament as the public, at the presidential and parliamentary elections, annihilated them. They cannot take advantage of the developments while in power as their governments did the same.

Political parties represented in Parliament have remained silent on the issues raised by the Nawa Jathika Peramuna. At least the former Speakers who had been accused of using fuel allowance without restrictions should respond to the declaration made by Parliament.

Let me end this piece by reminding the lone battle fought by top House administrative official Lacille de Silva during Chandrika Bandaranaike Cumaratunga’s presidency when the then Speaker, the late W.J.M. Lokubandara, sacked him. The Speaker swiftly moved against de Silva after the JVP frontliner (current Minister in the NPP government) Lal Kantha lambasted Parliament for waste, corruption and irregularities on the basis of information provided by de Silva.

Ranil Wickremesinghe served as the Prime Minister during this period. Intrepid official successfully moved the Supreme Court against the Speaker’s move and emerged triumphant when the Supreme Court ruled against the controversial sacking. The Island, throughout de Silva’s campaign, stood by him. Lacille de Silva courageously made a series of disclosures that exposed those who sought to take cover behind parliamentary privileges.

The parliament, over the years, launched high profile projects to attract public attention. Some of these projects received the financial backing of the United Nations development Programme (UNDP). Perhaps the Parliament, and those working with the highest institution, should examine the conduct of the House.

Sri Lanka cannot continue with waste, corruption, irregularities and mismanagement at any level anywhere. The legislature, under any circumstances, cannot be above the law of the land. The same should apply to the executive, as well.

By Shamindra Ferdianndo

As mathematics has been developed to solve problems faced by our cultures, many words that are being used in mathematics have been borrowed from our spoken languages. Some words have been specifically invented only for mathematical purposes. The mixing of these words can create confusion amongst students. As the vocabulary we use in the classroom has wide implications for the learning of students, it is worthwhile to reflect on the uncertainty that it can arise and how to deal with them effectively.

In mathematics, some English terms can cause confusion because the common usage of the word differs from the mathematical usage of the word. This can lead to misinterpretation and thereby difficulty in conceptual understanding. Let us consider some examples. The common understanding of the word in the English language is marked as E, and the mathematical meaning is marked as M.

There are also some words such as axiom, coefficient, equation, ordinate, isosceles and transcendental that are not commonly used outside the mathematics classroom. This is what separates the language of mathematics from other languages. However, the principles and foundations of mathematics remain consistent no matter what language one speaks. This is why mathematics is considered a universal language as mathematics can be comprehended whatever natural language one speaks.

Let me give some examples how the students may get confused with terminology.

Consider the words ‘minus’ and ‘subtraction’. It must be stressed to the students that ‘minus’ (-) is the symbol used to indicate the operation of subtraction. The expression 5 – (-3) should be referred to as ‘From 5, subtract minus 3’. For convenience if it is expressed as ‘5 minus, minus 3’, the student may misunderstand it and consider it as ‘5 minus 3’, ignoring the second ‘minus’ as done with the ‘plus’ sign.

When it comes to algebra, a term that is commonly used is ‘cancel’ to denote ‘divide’. If the question is to simplify 12x/8, and if the students are told that they can cancel both numerator and denominator by 4 and obtain the answer 3x/2, they might get the wrong idea that they can always cancel similar terms. Therefore, if the question was (12x + 5)/8, they will use this idea to incorrectly write a solution as (3x + 5) / 2.

Another commonly used phrase is ‘cross multiply’ to denote transpose. To solve the equation (2x+3)/2 = (3x-2)/5, if they are told that it can be done through cross multiplication to obtain 5(2x+3) = 2(3x – 2), they may wonder what needs to be done to solve (2x+3)/2 = (3x-2)/5 + 1.

The terminology used in a question may also bring confusion amongst students. A good example can be a question such as “Show that a number divisible by 6 is even”. It is not surprising to find answers of the form “24 is divisible by 6 and it is even”. The student has misinterpreted the question which meant ‘all’ to mean ‘some’. Perhaps the question could have been worded as “Show that every number divisible by 6 is even”.

Consider a question to find the hypotenuse of a right-angled triangle when given the other two sides such as:

Here, if you consider the English meaning of the word ‘find’, you cannot find fault with what the student had done. But what is expected in mathematics is different. Perhaps the question could have been stated as “Find the value of x”.

Similarly, there can be confusion with the words ‘or’ and ‘and’. In the English language, ‘or’ means one or the other but not both. ‘Chicken or Fish’ means either chicken or fish. But in mathematics ‘or’ is inclusive by convention.

The answer to find the set representing A or B is given as A U B = {1,2,3,4,5,7,9}.

Similarly, in English ‘and’ is a conjunction used to connect words. In English, ‘Apples and Oranges’ would mean that all apples and oranges are considered. However, in mathematics ‘and’ means that both have to be true. In the example above A and B represents the set {1,3,5}.

Teachers should be aware of these situations and explain the differences using appropriate examples. Students hear and use words in their daily lives that take on different meanings to what they use in the mathematics classroom. We need to realize that it can bring confusion in the minds of the students and be prepared to help them to make their mathematical journey more successful. The ability to use proper words is essential for developing mathematical proficiency as students need to communicate mathematically effectively either verbally or in written format. As such, the introduction and clarification of related vocabulary of the lesson becomes a crucial activity for the teachers.

The author is an educational consultant at the Overseas School of Colombo and a Senior Examiner in Mathematics at the International Baccalaureate Organization.

by R N A de Silva
rnades@gmail.com

In February 2024, during the Ranil Wickremesinghe administration, an IMF technical assistance team visited Sri Lanka at the request of the SL government, to help it to implement the commitments under the Extended Fund Facility, “in relation to property and wealth taxation”. They were received by Mahinda Siriwardene, Secretary to the Treasury.

The mission led by Sebastian Beer of the Fiscal Affairs Department (FAD) of the IMF and two external experts, Riel Granzen and William McCluskey issued a report by May 2024, detailing their recommendations. (SRI LANKA Property Taxation at the National and Sub-national Level May 2024).

Their first recommendation was to introduce Imputed Rental Income Tax (IRIT) for owner occupied and vacant residential properties, which is to tax homeowners on a fictitious rental income which they never receive: a tax payable without any cash flow to the taxpayer. The IMF defines what Imputed Rental Income means in their report: “Imputed rental income is the deemed income that homeowners could earn if they rented out their homes”.

The Wickremesinghe administration made preparations to introduce it, with State Minister of Finance Ranjith Siyambalapitiya announcing by June 2024 that individuals with more than one house not rented out, would be subject to that tax by the second quarter of 2025.

By October 2024, the new government under President Anura Kumara Dissanayake rejected this proposal. In an interview given to Shenel Fernando of The Morning, Senior Consultant to the President on Economic Affairs and Finance at the time, Prof. Anil Jayantha Fernando said that the AKD Government was “fundamentally opposed to the proposal by the previous Government to introduce an imputed rental income tax as it was essentially a tax on a non-existent income.”

He also said “the IMF did not intend to dictate to a country to implement specific taxes, adding that the only requirement by the IMF was for each country to come up with viable revenue generation schemes to meet the targets set by the fund. All it does is to give us a target…It is upon the Government to propose methods to derive income in a manner that the general public will not find overbearing”.

8 Months Later…

At the beginning of July 2025, several news reports revealed that the NPP government had informed the IMF that they plan to introduce a “nationwide property tax” as part of their “revenue mobilisation strategy”. So far, this tax hasn’t been named nor details revealed.

Newswire reports on 8th July that “Finance Ministry said the focus of this tax is on high wealth individuals, and not on average income earners. This objective will be achieved by a suitable tax-free threshold to ensure that the tax is targeted on very high value property or multiple properties that are owned by wealthy members of society.”

A letter sent by President Anura Kumara Dissanayake to the Managing Director of the IMF Kristina Georgieva reportedly states that he is “fully committed to the economic reform programme supported by the Extended Fund Facility (EFF).”

So, is IRIT 2024 back on the agenda or has the government come up with something entirely different to boost their property tax revenue which can be utilised by the government to support the IMF programme, overcoming the constitutional provision that property tax accrues to the provincial councils?

Constitutional obstacles to IRIT

The IMF recognises that property tax is due to local authorities for the development of areas where the tax is collected and the revenue from property tax cannot be utilized for commitments under the Extended Fund Facility (EFF) by the government. Their report says “However, in accordance with Sri Lanka’s constitution, property-related tax revenue, currently amounting to around 0.2 percent of GDP, fully accrues to subnational governments.”

The IMF then suggests a way around this constitutional obstacle:

“Taxing the imputed rental income from owner-occupied and vacant residential property, rather than taxing real property directly, would allow raising central government revenue.”

In fact, the IMF’s technical assistance report’s main recommendations include “urgently devising a mechanism to ensure that any increased revenue from property taxation increases the central government budget to meet the commitments made under the current IMF programme.”

Here the IMF suggests that by evaluating the value of the property as potential “income”, a tax can be collected by the Inland Revenue, legitimately accruing to the government’s coffers rather than the ‘subnational’ councils, therefore increasing the government’s capacity to meet “the commitments under the current IMF programme”

The report explains “The fundamental difference between an imputed rental income tax and a property tax is a legal interpretation of what constitutes the base: income or an asset. Imputed rental income is taxed under the Inland Revenue Act, thus raising central government revenue while avoiding constitutional constraints of taxing property directly.”

This seems like a sneaky, cynical way to get around the generally accepted concept that property tax should accrue to local authorities who will in turn use those funds to improve the facilities of the area in which it was collected, proposing instead, a tax which has been used only in a handful of rich European countries, with Switzerland making arrangements to hold a referendum to abolish it this year.

The report acknowledges that “the 13th amendment of Sri Lanka’s constitution clarifies that property-related tax revenues accrue to subnational governments. All taxes collected at the central level are thus transferred to provincial councils”.

However they point out a way collect new taxes while remaining “within the constitutional constraints”:

“Constitutional constraints to raising central government revenue from property taxation can be avoided by introducing an imputed rental income tax (IRIT). Such tax is levied on the implicit income (or benefit) that is derived from owner-occupied property and would be imposed under the Inland Revenue Act, with revenue naturally accruing to the central government.”

The IMF Report clarifies that provision should be made for those under a certain income threshold “as the tax base will be, at least in the short term, unrelated to taxpayers’ ability to pay.” They suggest that “As a general measure, imputed rental income should only be taxed above some threshold to ensure the IRIT targets the wealthier owner-occupied residential properties.”

However, due to a number of reasons including global economic uncertainty including the Trump Tariffs, how long will it be before this government decides to pass the burden to this country’s hard-pressed middle classes through such taxes?

People may be willing to support a government’s austerity measures if they had seen it at least trying to renegotiate the unfavourable debt restructuring terms of the IMF and the private creditors. However, are these new measures the result of the current administration’s diffidence in the face of International Financial Institutions, which prevented it from renegotiating better terms and obtaining a substantial haircut of the country’s debt while other countries have done so more successfully?

Philip Alston, the UN Special Rapporteur on extreme poverty and human rights wrote in his report presented in Geneva (19 June 2018) that “To date, the IMF has been an organisation with a large brain, an unhealthy ego, and a tiny conscience.” It’s been 7 years since then, but one would have thought that a government would insist on renegotiation of an agreement with an entity with such a reputation in its history, that keeps suggesting inappropriate policies to poor countries in trouble.

IMF Folly

Dr Sirimewan Dharmaratne (Former Senior Analyst, HM Revenue, and Customs, UK.) criticised the new tax IRIT soon after it was proposed, in The Island on June 19, 2024, titling his article “IMF folly – Imputed Rental Income Tax”. He writes:

“This is a highly controversial and nonsensical tax that is imposed in only five countries, namely Iceland, Luxembourg, the Netherlands, Slovenia and Switzerland. None of these are developing countries and even in Switzerland, there is an ongoing debate on its abolition.”

He writes that IRIT “goes against the very principle of taxation…This tax is imposed on a non-income generating asset. As such, it is biased against those individuals who are asset rich but cash poor.”

Applying it to the Sri Lankan situation, he writes that “Most people strive throughout their working years to build a house that eventually becomes their family home. When they retire and income is drastically reduced, it not only becomes their permanent refuge, but also serves as a launching pad for grown up children until they become independent.” He recommends that “The IMF really should stay away from prescribing specific tax policies that are not suitable for Sri Lanka while the government should be much more erudite in holding their ground and fighting their corner”. [island.lk – IMF folly – Imputed Rental Income Tax]

An IMF Report titled “How Property Taxes Can Help Low-Income Countries to Develop” dated November 2024, recommends property tax be locally collected and spent. “… Recent events in several countries suggest that raising taxes can create social unrest. More efficient real estate taxes have an advantage in this regard: by being locally collected and spent, they may be politically less challenging than increases in broad-base national taxes.” https://www.imf.org/en/Blogs/Articles/2024/11/11/how-property-taxes-can-help-low-income-countries-to-develop#

Yet another titled “How to Design and Implement Property Tax Reforms” states that “The tight link at the local level between revenue and spending shields property taxes from national politics and imposes higher accountability standards on local councils for the effective use of the resources.” (https://www.elibrary.imf.org/view/journals/061/2024/006/article-A001-en.xml)

On this basis, one would suppose that it is safe to assume that the government would not resort to IRIT to increase its revenue base, but have come up with an alternative property tax. However, given the many promises disregarded, policy positions reversed and passionate criticisms made earlier replaced by full compliance, how safe is it to assume that they would not do the same with IRIT, and if they do so, would ensure they comply with the recommendations to adequately shield the economically vulnerable from its consequences?

by Sanja de Silva Jayatilleka