Editorial
Don’t eviscerate precious goose
Thursday 27th February, 2025
The proposed 15% services export tax exemplifies Sri Lanka’s deceptive taxation policy. The NPP government’s Budget 2025 has listed it as a corporate tax, but according to a Bill seeking to amend the Inland Revenue Act, the new tax will apply to all individuals who provide services to external parties and earn foreign exchange. Not even freelancers will be spared. The tax in question will apply to money brought back to Sri Lanka through the banking system.
The services export tax is bound to hinder Sri Lanka’s forex inflow and deliver a crippling blow to the country’s budding tech industry. It may drive Sri Lankan IT professionals working for foreign firms and bringing much-needed forex to park their earnings overseas and/or use informal forex transfer systems such as Hawala and Undiyal bypassing the banking system.
The living conditions of many Sri Lankans who have gone overseas for employment, for want of a better alternative in view of the current economic crisis, are far from satisfactory. Most of these workers are doing odd jobs or have fallen prey to racketeers, as evident from the predicament of dozens of Sri Lankans trapped in the cyber slave camps in Myanmar. Therefore, it defies comprehension why the Sri Lankans earning foreign exchange and helping shore up the country’s forex reserves, without migrating, are not incentivised to earn more in foreign currency instead of being discouraged with taxes.
The government is desperate to increase its revenue to 15% of GDP in keeping with an IMF bailout condition. But in a bid to rally popular support ahead of an election, it has proposed in its Budget 2025 pay hikes for the public sector workers and some relief measures which will take a heavy toll on the state coffers. It is also planning to expand the state service, which is already bursting at the seams, by recruiting as many as 30,000 workers. It cannot increase the existing taxes any more, and its promise to save funds by curtailing state expenditure remains largely unfulfilled. So, it has resorted to measures such as the services export tax regardless of their adverse consequences.
Some international tech companies are expanding their operations in Sri Lanka, and this means more jobs for the local youth and a boost to the country’s forex inflow. The new tax at issue is fraught with the danger of driving those companies as well as talented Sri Lankan youth out of the country. Some of these companies are reportedly planning to shift their operations to other South Asian countries which are offering numerous concessions to them. Is the NPP government promoting foreign investment in other countries? It has failed to be different from its predecessors. It has not been able to attract adequate foreign direct investment despite its braggadocio. It is upbeat about a proposed foreign oil refinery, but cannot specify the economic benefits, which, it says, will accrue to this country! It should try to increase the forex inflow through available sources such as those who work for international firms and earn in foreign currency without leaving the country. These professionals can also be considered Rata Viruwas (an honorific politicians use for expatriate workers), though based here. They deserve encouragement.
It is hoped that the government will give the proposed services export tax a rethink. It must not eviscerate the goose that lays the golden eggs. Let it be urged to explore alternative ways and means of increasing its revenue, such as downsizing the state sector and rationalising its welfare expenditure. It is reportedly planning a heavily subsidised basket of goods in view of the local government polls slated for April. This is an election bribe or chanda gundu. What has the country gained from the fuel subsidy for fishers? The fertiliser subsidy has not helped bring down the prices of rice. Paddy farmers are refusing to sell their produce to the state-owned Paddy Marketing Board, which is trying to build a buffer stock to regulate the rice market.
The Opposition has claimed during the budget debate that online casino is not taxed. If so, why has the government baulked at imposing a new sin tax to boost its revenue and chosen to commit the sin of strangling the local tech sector and driving more Sri Lankan professionals out of the country? If it manages state funds frugally and streamlines revenue collection, it will be able to reduce its overdependence on tax and tariff increases and new taxes.
Editorial
Jekylls and Hydes
Monday 29th December, 2025
Sri Lankan politicians love the media dearly and take up the cudgels for the rights of journalists when they are out of power. The JVP/NPP leaders also defended the media to the hilt while they were languishing in the Opposition. Jekylls become Hydes after being ensconced in power, with the media exposing their failures and malpractices. Those who can, do; those who cannot, attack the media, one may say of the governments in this country, with apologies to Bernard Shaw.
The JVP-led NPP government, angered by bad press, is all out to intimidate the media it cannot control. Previous governments had the police on a string and used them to attack and harass independent journalists. The incumbent administration has gone a step further; the police have reportedly written to the Telecommunications Regulatory Commission (TRC), asking for action against Hiru TV for what they describe as broadcasting unverified, misleading news. Thus, the government has used the police to give Hiru a choice between toeing the official line and losing its licence. Thankfully, its efforts have run into stiff resistance, with media institutions and various associations circling the wagons around Hiru.
If the government thinks Hiru or any other media institution disseminates false information to the detriment of its interests, legal avenues are available for it to seek redress. The police must not be used as a political tool to intimidate the media.
Among the current defenders of the media are the SLPP, the UNP, the SLFP, etc. Their leaders are shedding copious tears for Hiru. But it was while the UNP and SLPP leaders were in power that the suppression of media freedom and violence against journalists became institutionalised for all intents and purposes. UNP governments not only throttled media freedom but also murdered journalists. SLFP regimes had media institutions attacked and journalists killed. An SLFP-led government, with the current SLPP leaders at the helm, had media institutions torched and journalists abducted, assaulted and murdered. These sinners currently in the political wilderness are condemning other sinners in power for suppressing media freedom.
The government deserves the bad press it gets. The police have been reduced to a mere appendage of the JVP/NPP. Two of the NPP’s Retired Police Collective members, namely former Senior DIG Ravi Seneviratne and former SSP Shani Abeysekera, have been appointed Secretary to the Public Security Ministry and CID Director, respectively. Absurd claims the police make in defence of the government remind us of Matilda, whose dreadful lies made one gasp and stretch one’s eyes.
When the police were asked why NPP MP Asoka Ranwala had not been subjected to a breathalyser test immediately after a recent road accident he caused, they had the chutzpah to claim they had run out of test kits. They transferred two of their officers over the incident to enable the government to save face. They arrested one of their own men assaulted by an NPP MP following a recent police raid on a cannabis cultivation in Suriyakanda. Acting just like legendary King Kekille, they let the MP off the hook and arrested the policeman, who was bailed out; they went on to suspend him from service. A few months ago, they unashamedly sided with a group of JVP cadres who stormed a Frontline Socialist Party office in Yakkala and forcibly occupied it. They go out of their way to ensure that the arrests of drug dealers with links to the Opposition get maximum possible publicity, but they do their best to keep the media in the dark when narcotics dealers with ruling party connections are taken into custody. They crack down on Opposition politicians and activists but steer clear of government members and their supporters. The despicable manner in which they are doing political work for the government reminds us of the Gestapo. Now, they are zeroing in on Hiru TV at the behest of their political masters for exposing their sordid actions.
The only way the NPP government can overcome problems and challenges on the political front and shore up its crumbling image is to mend its ways and fulfil its election pledges while taking action against its errant members who have brought it into disrepute and turned public opinion against it. Shooting the messenger is not the way to set about the task.
Editorial
Executive brinkmanship
Pressure is mounting on President Anura Kumara Dissanayake to ensure that an Auditor General is appointed without further delay. But he has remained unmoved. He is determined to wear down the Constitutional Council (CC) and appoint one of his party loyalists as Auditor General. The CC has rejected his nominees—and rightly so; they are not eligible. Former Executive Presidents went all out to railroad the CC into rubber-stamping their decisions. They had no qualms about doing so while claiming to uphold the independence of the public service. President Dissanayake has failed to be different. His refusal to compromise amounts to brinkmanship; he is waiting until the CC blinks.
The NPP’s election manifesto, A Thriving Nation: A Beautiful Life, attributes the deterioration of the public service to ‘political appointments’ and state workers making political decisions. Among the steps the NPP has promised to take to straighten up the public service are ‘merit-based appointments and promotions’. This principle has fallen by the wayside where the question of appointing the Auditor General is concerned.
The government should take cognisance of the possible negative effects of the prolonged delay in appointing the Auditor General during a period of disaster response and international relief and rebuilding support.
The Bar Association of Sri Lanka has called upon President Dissanayake to appoint a person with proven competence, integrity, and independence, who commands wide acceptance as Auditor General forthwith. It has stressed the need to appoint a nonpartisan professional as the Auditor General to safeguard the integrity of the National Audit Office and inspire the confidence of both citizens and international partners in the financial governance of the State.
Transparency International Sri Lanka, the Civil Society Organizations (CSOs) and the other good governance activists, too, have faulted President Dissanayake and his government for the inordinate delay in appointing the Auditor General. They are of the view that a strong, independent Auditor General enables Parliament and the public to scrutinise government expenditure, identify irregularities, prevent misuse of funds, and ensure that those entrusted with public resources are held to account. The delay in appointing the Auditor General has weakened the effectiveness, authority, and the independence of the entire public audit system and created space for inefficiency, mismanagement, and corruption, they have noted. The situation will take a turn for the worse if the government succeeds in having one of its cronies appointed Auditor General.
The government is apparently playing a waiting game in the hope that the reconstitution of the CC due next year will provide a window of opportunity for it to appoint one of its loyalists as Auditor General.
Why the government is so desperate to place a malleable person at the helm of the National Audit Office is not hard to understand. If it succeeds in its endeavour, the next Auditor General will be beholden to the JVP/NPP. When an ineligible person is elevated to a high post, he or she naturally becomes subservient to the appointing authority. Such officials go out of their way to safeguard the interests of their political masters in case of irregularities involving state funds and other accountability issues.
A protracted delay in appointing the Auditor General or the appointment of a government supporter to that post will increase the risk of mismanagement of state funds and corruption, lead to the erosion of public trust and confidence in the National Audit Office, undermine legislative oversight and impair fiscal discipline. Most of all, the government’s failure to appoint a competent, independent person of integrity as Auditor General will diminish donor confidence especially at a time when the country is seeking disaster relief funds from the international community. There is no way the government can justify its refusal to appoint the current Acting Auditor General as the head of the supreme audit institution. He is obviously the most eligible candidate.
Editorial
Selective transparency
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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