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.
ECT, Port City and Potemkin village
Wednesday 20th January, 2021
The East Container Terminal (ECT) dispute remains unresolved. Protesting port workers have rejected a government condition for negotiations as a Hobson’s choice; they have said the government has offered to discuss the issue, provided they agree to consider the proposed joint venture between the Sri Lanka Ports Authority and India’s Adani Group as non-negotiable. Having further talks on the government’s terms will be tantamount to an endorsement of the ECT deal, the protesters have said.
The warring port workers are likely to harden their position further and even flex their trade union muscles. This is something the country cannot afford at this juncture, but the government has sought to play a game of chicken. The economy cannot take any more shocks, and a port strike will send it into a tailspin.
Praise for the government has come from an unexpected quarter. Former Minister Mangala Samaraweera, one of the bitterest critics of the government, has commended it for having struck the ETC deal with India; in the former’s eyes the latter can never do anything right, but both of them are on the same wavelength where the questionable joint venture is concerned! Bashing the government is the raison d’etre of most NGOs, which are all out to have pariah status conferred on the present-day leaders for the country’s successful war on terror, but curiously they too have showered praise on the government for the proposed ECT joint venture with Adani Group as a partner!
Interestingly, the forces that propelled the SLPP to power are now berating the government for the ECT deal, which, they say, is detrimental to Sri Lanka’s interests. Those who did their darnedest to have the SLPP defeated at the last two elections and are hell bent on demonising its leaders as enemies of democracy are supporting it on the ECT agreement. Thus, the government is receiving praise from its enemies and brickbats from its allies! What has caused this strange realignment of forces?
Adani Group, which is the Modi government’s most favoured company, has come under heavy criticism for the rapaciousness of its business practices both at home and abroad. Protesting Indian farmers have blamed it for their woes, and in Australia it stands accused of employing environmentally destructive methods in mining. In India, the Central Bureau of Investigation has booked the Adani Enterprises Ltd, which is considered the flagship company of Adani Group, for securing a government contract for supplying imported coal in an allegedly fraudulent manner. Sri Lankan politicians love to do business with such companies!
One of the main election pledges of the SLPP was to form a ‘patriotic government and undo what the yahapalana administration had done. But it has chosen to jettison its patriotism and follow the yahapalana policy on state assets, as evident from its decision to partner with a foreign company to operate the ECT, which the Sri Lanka Ports Authority is capable of managing on its own as a profitable venture. As for the ECT, the incumbent government has done exactly what the yahapalana regime did anent the Chinese Port City. The previous administration vowed to scrap the Chinese project, condemning it as an environmental disaster, but approved it in the end.
The government has said it will attract foreign investment without either selling or leasing the ECT; this is only an impressive façade that hides an unpleasant situation, or Potemkin village as political scientists call it.
If the SLPP leaders ignore the fate that awaits those who strike deals with companies notorious for questionable business practices, they will do so at their own peril. They ought to learn from the predicament of the UNP leaders who had dealings with Perpetual Treasuries, which carried out the Treasury bond scams.
Tuesday 19th January, 2021
Some female local government members have come together to form a front against discrimination and harassment they face in their councils. They have called upon all female representatives throughout the country to sink their political differences and join forces to safeguard their rights, according to a news item we published yesterday. This initiative deserves encouragement and assistance from everyone.
It is heartening that female councillors have decided to go public with their grievances instead of suffering in silence. Such action is bound to have a deterrent effect on the shameless councillors who apparently make themselves feel important at the expense of their female counterparts. These elements, we believe, need the assistance of men in white coats.
A member of the female councillors’ collective against discrimination and harassment has told the media that not even their freedom of expression is respected at council meetings, which are dominated by overbearing, ill-tempered men who turn aggressive and abusive at the drop of a hat. Whenever women took the floor, they were greeted by catcalls and boos from men in kapati suit, she complained. This sorry state of affairs has curiously gone unnoticed by the political party leaders, who are full of praise for women when they make public speeches. All political parties have women’s wings and their manifestos contain pledges to safeguard women’s rights, but female local council members continue to suffer. Perhaps, this should not surprise anyone, given the sheer number of political dregs in the garb of people’s representatives; they are no respecters of fellow humans, much less women. It is doubtful whether they respect even their own mothers and sisters.
Women account for more than one half of Sri Lanka’s population, but sadly this is not reflected in the number of elected representatives. Politics remains a male-dominated field, and this may explain why it is rotten to the core and stinks. Perhaps, it is only in the Maharagama UC that women have received their due share of representation; out of its 47 members 24 are women, as our news item said, quoting a female councillor, who alleged that even in that institution, women’s rights were suppressed. Gender-based discrimination is a punishable offence, and it is puzzling how the misogynistic elements among the local government members have gone scot-free.
Parliament legislated for increasing female representation in local government institutions and introduced a new electoral system. It was no doubt a very progressive step. But what is the use of increasing the number of female councillors if their rights are not safeguarded or they cannot even have themselves heard at council meetings?
Meanwhile, in January 2016, some female MPs revealed to the media, on condition of anonymity, that they underwent sexual harassment in Parliament. They accused some randy male counterparts who were old enough to be their fathers of making advances and cracking dirty jokes at their expense. They stopped short of naming names, though. The then Speaker Karu Jayasuriya promised a probe and requested the victims to make formal complaints. But nobody came forward for fear of either reprisal or stigma, or both.
The alliance being forged against gender-based discrimination should be expanded to include female MPs as well if it is to evolve as a formidable force. Then only will its voice be heard in Parliament.
All those who abhor harassment and discrimination that female representatives suffer, in political institutions, at the hands of the spineless creatures who call themselves men must stand up and be counted. These misogynists must be named and shamed before being hauled up before courts. Let their victims be urged to make official complaints of instances of assault on human dignity and reveal the names of culprits to the media. Female electors must stop voting for these politicians by way of punishment.
Shame on the self-righteous political leaders who have given misogynists within the ranks of their parties quite a long leash! It is high time these macho Neanderthals were reined in.
Make killers pay
Monday 18th January, 2021
Health authorities in some parts of the pandemic-hit US are in a dilemma over the prioritisation of risk groups for vaccination. The New Jersey government is reported to have decided to vaccinate smokers on priority basis as they run a higher risk of having Covid-19 complications than others. It has drawn heavy criticism for its decision, which will result in smokers getting the jab before teachers and public transport workers, we are told.
Covid-19 vaccine saves lives, especially those of people afflicted with chronic non-communicable diseases. The opinion of the New Jersey officials is that smokers should be given the jab as early as possible if their lives are to be saved. But others are convinced otherwise; they ask whether smokers who are fully aware of the health risks they expose themselves to when they puff away at ‘coffin nails’ should get the first dibs on the vaccine. This has led to an ethical dilemma of sorts.
The critics of the New Jersey government decision insist that if smokers are a vulnerable group, they must be asked to remain indoors instead of being inoculated before others who actually deserve priority, given the essential services they render to society during the pandemic, risking their lives. Some people argue that smokers should not be discriminated against in saving lives as their right to life must also be respected. There is yet another school of thought, which opines that only those with respiratory diseases, etc., among smokers should be given priority in the vaccination programme just like those with the same health issues. But the problem is that all smokers are at a higher risk than nonsmokers where the pandemic is concerned.
A false claim is being propagated in some quarters—perhaps at the behest of the powerful tobacco industry—that smokers are underrepresented among the Covid-19 patients needing hospitalisation, and, therefore, smoking, which is associated with morbidity and mortality in many diseases, is protective against the pandemic!
Thankfully, the World Health Organisation (WHO) and the US Food and Drug Administration have given the lie to this claim. The WHO has confirmed that available evidence suggests that smoking is associated with increased severity of disease and death in hospitalised Covid-19 patients. New Jersey Health Commissioner Judith Persichilli has told the media, ‘Smoking puts you at a significant risk for and adverse results from Covid-19.” It has thus been established that smoking is a danger, especially during the pandemic, and the question is why no action has been taken against the tobacco industry, which is making huge profits at the expense of public health, the world over.
The WHO has revealed that tobacco kills more than 8 million people a year in the world; more than 7 million of those deaths are the result of direct tobacco use while around 1.2 million are the result of non-smokers being exposed to second-hand smoke. The US Centres for Disease Control and Prevention (CDC) has revealed that cigarette smoking causes more than 480,000 deaths per year in the US. This is about one in five deaths annually, or 1,300 deaths a day, the CDC has said. Covid-19 has killed about two million people globally including about 390,000 Americans during the last 13 months or so. Isn’t the tobacco Mafia more dangerous than coronavirus, and what action has the world taken against it?
Sri Lanka will face the same problem as New Jersey sooner or later when the national vaccination drive gets underway, and risk groups have to be identified. If the current health crisis takes a turn for the worse with the death toll increasing exponentially—absit omen—the high-risk groups including smokers will have to be inoculated before others. The state will have to pay for most of the vaccine doses. It will be a huge financial burden on the cash-strapped government, which will invariably increase its revenue by jacking up indirect taxes. Thus, everyone will have to pay for the vaccine although it is said to be free. It may not be possible to vaccinate everyone, given the huge cost of the vaccine, logistical issues and the sheer number of people to be inoculated although Sri Lanka boasts an efficient healthcare system. How fair will it be to allow smokers to get the shots first at the expense of other citizens while the tobacco industry is earning massive profits without giving anything back for the benefit of its loyal customers?
Let it be suggested that the cost of vaccinating the people who are suffering from smoking-related diseases that predispose them to Covid-19 complications be recovered from the tobacco industry by way of a new tax. Statistics about the number of smokers, etc., are readily available and it is not difficult to determine the cost of vaccinating them. Killers must be made to pay.
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