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Editorial

Death and taxes: inevitabilities of life

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Benjamin Franklin, a founding father of the United States of America and a drafter and signer of its Declaration of Independence wrote centuries ago that “our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.” Though the inevitability of death and taxes has now assumed the garb of a hoary cliché, its validity remains unchallenged to this day. The Buddha said anicca vata sancara (all things are impermanent) many millennia before Franklin and it can be presumed that taxes, as we now know in the modern day, did not exist in the Buddha’s time.

With the New Year. and together with it the higher VAT (value added tax) kicking in, we Lankans battling an ever soaring cost of living and government’s demand, at the behest of the International Monetary Fund (IMF), for more revenue are now obsessed with taxes, both direct and indirect. According to Wikipedia Indirect taxes in the forms of excise duties, VAT and tariffs are the key contributors to the government tax revenue with 74% while direct taxes including income tax, Pay-as-you-earn tax and Economic Service Charge contribute only around nine percent.

Thus income taxpayers, including professionals, grumbling about the prevailing high rates of tax need to realize that the indirect tax burden falls on the entire population including the impoverished segments. We are in this context reminded of an anecdote published in the old Illustrated Weekly of India several decades ago of a market vendor woman telling a customer grumbling about income tax. “if I had your income, I’d be glad to pay your taxes.”

But income taxpayers do have a real grouse that the inland revenue authorities applying the tax squeeze on those of them on file, have over a very long period of time been hopelessly inept at widening the tax net and ensuring that those liable to income tax “render unto Caesar, the things that are Caesar’s.” Both illegal tax evasion and avoidance which is legitimate has been rampant for as long as the Income Tax Department of yesteryear and its successor, the Inland Revenue Department, have been in existence.

But despite the grand sounding titles bestowed upon its hierarchy, as elsewhere in the public service, delivery of revenue into state coffers or the closing of loopholes in the law enabling avoidance have been nowhere near what it should be. An official once titled Commissioner of Income Tax (or Inland Revenue) has now become Commissioner General, the Deputy Commissioners of the past are now Commissioners and so on and so forth.

At a news discussion hosted last week by the President’s Media Division (PMD), Central Bank Governor Nandalal Weerasinghe encouraged people to bring tax evasion to the notice of the authorities to help reduce their own taxes in the future. In effect, he was advocating “whistle blowing” as it is commonly called or ‘ratting’ as the victims may choose to label it.

The Inland Revenue Department, we are sure, must be receiving numerous petitions on tax evasion. As in the customs, it is very likely that informants are rewarded if information provided leads to successful assessment and collection. There is no doubt that whistle blowing and petitions are mostly triggered by reasons of personal enmity rather than any interest in the public weal. Alternatively, the informants are looking at the rewards they can get for themselves.

But the public is well aware that over a very long period of time, the political and bureaucratic establishments have scratched each other’s backs for personal advantage for themselves. One very good example was in the seventies when Mr. Ronnie de Mel was finance minister in the J.R. Jayewardene government, emoluments paid by the government was relieved of income tax. Member of Parliament too received the same benefit.

The justification for this measure was that public and private sector salaries were not on par and it was necessary to incentivise senior public service managers to remain in service and not take private sector jobs for better pay. This argument was riddled with holes. There were public service employees like planters in the various company owned estates who enjoyed very good terms which remained after the takeover.

But they too got the break of no tax on their pay and perks. Also, not all private sector employers pay their employees well. While many of the big companies do, most of the small one don’t.

It was the same JRJ government that did away with estate duty which the present government is planning to reintroduce from 2025 as an inheritance tax. Some employers, including in the state sector, pick up (or picked up) the tax tabs of their employees. There are numerous weaknesses in the existing tax system that requires immediate attention but no serious action in this regard is visible.

Time was when dividend and interest income was taxed at source. This is a convenient collection method but with the serious weakness that many retired persons, living on interest income from fixed deposits, got taxed although their incomes were below taxable thresholds. As everybody knows, getting money back from the government is like getting water out of a stone.

It was revealed a few days ago that the stupid proposal that all Lankans over the age of 18-years must have a taxpayer information number (TIN) or risk penalties running up to Rs. 50,000 is not being implemented. What State Finance Minister Ranjith Siyambalapitiya said was the penalty was not going to be slapped. But he did not say the proposed TIN registration for all Lankans over 18, probably an advance of the digitisation ambition, was being abandoned.

Most Lankans over 18-years old have National Identity Cards. Siyambalapitiya stressed that having a TIN did not mean those below the Rs. 1.2 million taxable threshold would have to pay taxes. They remain exempt. Why then was the empty threat made?



Editorial

Selective transparency

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Saturday 27th December, 2025

The NPP government has released a cordial diplomatic letter from Indian Prime Minister Narendra Modi to President Anura Kumara Dissanayake, and gained a great deal of publicity for it as part of a propaganda campaign to boost Dissanayake’s image. Such moves are not uncommon in politics, especially in the developing world, where the heads of powerful states are deified and their visits, invitations and letters are flaunted as achievements of the leaders of smaller nations. However, the release of PM Modi’s letter to President Dissanayake is counterproductive, for it makes one wonder why the government has not made public the MoUs it has signed with India?

PM Modi’s Sri Lanka visit in April 2025 saw the signing of seven MoUs (or pacts as claimed in some quarters) between New Delhi and Colombo. Prominent among them are the MoUs/pacts on the implementation of HVDC (High-Voltage Direct Current) Interconnection for import/export of power, cooperation among the governments of India, Sri Lanka, and the United Arab Emirates on developing Trincomalee as an energy hub, and defence cooperation between India and Sri Lanka.

The NPP government has violated one of the fundamental tenets of good governance––transparency; there has been no transparency about the aforesaid MoUs or pacts, especially the one on defence cooperation. They cannot be disclosed without India’s consent, the government has said. This is a very lame excuse. The JVP/NPP seems to have a very low opinion of the intelligence of the public, who made its meteoric rise to power.

When the JVP/NPP was in opposition, it would flay the previous governments for signing vital MoUs and pacts without transparency. But it has kept even Parliament in the dark about the MoUs/pacts in question.

Ironically, the JVP, which resorted to mindless violence in a bid to scuttle the signing of the Indo-Lanka Accord in 1987, has sought to justify the inking of an MoU/pact on defence cooperation between Sri Lanka and India and keeping it under wraps, about three and a half decades later. The signing of that particular defence MoU/pact marked the JVP’s biggest-ever Machiavellian U-turn. How would the JVP have reacted if a previous government had entered into MoUs with India and kept them secret? It opposed the proposed Economic and Technology Cooperation Agreement (ETCA) between Sri Lanka and India tooth and nail, didn’t it?

Whenever one sees the aforesaid letter doing the rounds in the digital space, one remembers the MoUs/pacts shrouded in secrecy, which have exposed the pusillanimity of the NPP government, whose leaders cannot so much as disclose their contents without India’s consent.

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Editorial

Desperate political sandbagging

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Friday 26th December, 2025

There is nothing more predictable than surprise in politics. After securing a two-thirds majority in Parliament last year and emerging victorious in most local councils, this year, the JVP-led NPP may have thought that it was plain sailing. But the government now has many unforeseen, seemingly intractable issues to contend with almost on all fronts. The disaster-stricken economy is expected to slow down, with relief and rebuilding costs escalating, and the deadline for the resumption of debt repayment approaching. Vehicle imports are bound to decrease, causing a sharp drop in the government’s tax revenue. The rupee is depreciating fast. As if these were not enough, the government is experiencing serious problems on the political front.

The defeat of the NPP’s budget in the Colombo Municipal Council (CMC), which the JVP/NPP seized control of through extensive horse trading, could not have come at a worse time for the government. The same fate has befallen many other NPP-controlled local councils. Most of all, the NPP has suffered a string of defeats in the cooperative society elections countrywide during the last several months.

Desperate times are said to call for desperate measures. Cyclone Ditwah and the attendant extreme weather events that badly damaged roads, tank bunds and river banks prompted repair teams to resort to sandbag revetment. But there have been many instances where sandbag facings collapsed, unable to withstand the intensity of floods and slope failures. The government politicians who boasted of having carried out swift restoration work have been left red-faced; they have failed to assess the severity of the problems they are trying to solve.

The NPP government has resorted to a method similar to sandbag revetment in a desperate bid to consolidate its control over some local councils which cannot secure the passage of their budgets for want of majorities. Its members have gone to the extent of setting the clock forward in such institutions, meeting in advance of the regular start time and declaring their budgets passed before the arrival of the Opposition councillors. What the NPP did in the Horana Urban Council the other day is a case in point, the Opposition says.

The NPP is accused of having inflated the number of votes for its Galle MC budget amidst a howl of protests from the Opposition and declared victory. The Opposition councillors prevented the council secretary from leaving the auditorium, put the budget to a fresh vote and defeated it. The Opposition has threatened legal action against the Mayors/Chairpersons and the state officials for violating the law. The government is likely to employ a similar method to have the CMC budget passed when it is put to a vote again next week. The JVP has no sense of shame, just like all other political parties that have been in power.

All self-righteous politicians, given to moral grandstanding, lay bare their true faces when their interests are threatened, and they face the prospect of losing their hold on power. The JVP/NPP is now without any right to be critical of its rivals who did not scruple to undermine democratic principles and traditions to retain power.

Gaining control of hung local councils is one thing, but running them to the satisfaction of their members and the public is quite another. The non-majority councils that the Opposition parties have gained control of could face the same fate as the CMC. This situation has come about because the country is without patriotic leaders. Ideally, the political parties that obtained pluralities in the hung councils should have been allowed to control those institutions, and they should have adopted a conciliatory approach and sought their political rivals’ cooperation to serve the public.

The shameful manner in which the NPP acted during the Galle MC budget vote is not unprecedented. One may recall that in January 2024, the SLPP-UNP government did something similar to secure the passage of its despicable Online Safety Bill. The then Speaker Mahinda Yapa Abeywardena stooped so low as to make use of a brawl in the House and declare the Bill passed. Interestingly, the SLPP and the UNP are among those who are raking the NPP over the coals for undermining democratic principles and traditions. So much for the self-proclaimed messiahs and their critics.

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Editorial

Christmas spirit, relief and pledges

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Thursday 25th December, 2025

Christmas has dawned while Sri Lanka is reeling from the cumulative impact of multiple disasters which snuffed out hundreds of lives and destroyed many homes and livelihoods. It is a time of hope. Its ethos, which emphasises hope, compassion and giving, could not be more relevant in these difficult times when the task of looking after a large number of disaster victims and helping rebuild their shattered lives has become a top national priority.

Santa came here the other day, as it were. There was no magical flight of a sleigh pulled by reindeer across the night sky. Instead, a jet landed at the BIA, and out stepped Indian External Affairs Minister S. Jaishankar. He unveiled a generous disaster relief and reconstruction package from India and flew back. This noble act of giving exemplifies the spirit of Christmas as much as good neighbourliness.

The best way the Sri Lankan rulers can show appreciation for generous assistance from India and other nations is to uphold accountability, rationalise disaster relief and ensure that it is distributed in a transparent manner. There are disturbing reports about political interference with the disbursement of funds among disaster victims. A high-level probe must be conducted into these allegations.

Christmas is also the season of giving and forgiving. The irony of Minister Jaishankar meeting President Anura Kumara Dissanayake, who is also the leader of the JVP, may not have been lost on keen political observers. If the JVP had acted wisely, heeding religious tenets, and pursued its political goals without resorting to violence, in the late 1980s, tens of thousands of precious lives and state assets worth billions of rupees could have been spared. India has forgiven the JVP, which it even helped gain international legitimacy and shore up its electoral chances in the run-up to last year’s presidential election. India has also helped Sri Lanka manage its worst-ever economic crisis and the impact of natural disasters. The people of Sri Lanka have also forgiven the JVP, despite its past violence, as evident from its impressive electoral victories last year. Sadly, the JVP is not willing to forgive its political enemies. Its General Secretary Tilvin Silva himself has said so. It ought to soften its stand.

All political leaders in this country usually issue well-written Christmas messages, extolling the core Christian virtues, such as giving, forgiving, compassion and peace-making. If only they lived up to the ideals they claim to cherish, at least while the country is struggling to recover from a series of natural disasters. Unfortunately, their post-disaster political battles are intensifying apace, and one wonders whether their focus is actually on helping disaster victims or furthering their political interests. They are not willing to sink their political differences for the sake of the disaster victims crying out for relief.

Meanwhile, the government leaders ought to go beyond issuing Christmas messages if they are to prove that they actually care about the believers in Jesus Christ. They ought to fulfil their pledge to serve justice for the victims of the Easter Sunday terror attacks (2019), which claimed more than 275 lives.

About seven years have elapsed since that tragedy which could have been prevented if the then government had heeded intelligence warnings, and the country has had four Presidents and three governments. But the promises made by the political leaders to bring the masterminds behind the Easter Sunday carnage to justice have gone unfulfilled. Those who are desperately seeking justice pinned their hopes on the current leaders who vowed to trace and prosecute the terror masterminds expeditiously.

The present-day leaders, too, have chosen to remain silent on their promise at issue; they are impervious to calls for justice, just like their predecessors. Let fulfilling their pledge to serve justice for the Easter Sunday terror victims be one of their Christmas resolutions.

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