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SJB: Situation wouldn’t have deteriorated if govt. had acted six weeks earlier

‘PM ruled out lockdowns in talks with Chinese Defence Minister’
By Shamindra Ferdinando
Samagi Jana Balavegaya (SJB) parliamentarian Mujibur Rahman yesterday (13) alleged that the country was paying a huge price for the government’s refusal to heed medical experts’ advice to impose stringent measures to curb movements.
Had the government acted at least six weeks ago, the ground situation wouldn’t have deteriorated to such an extent, the Colombo District MP told The Island.
Wednesday’s sudden declaration that countrywide travel restrictions would be imposed on Thursday (13), at 11 pm till Monday (17) 4 am pending further measures depending on the requirement revealed the crisis the country was facing, the MP said.
Lawmaker Rahman pointed out that no less a person than Prime Minister Mahinda Rajapaksa as late as April 28 assured the visiting Chinese Defence Minister Wei Fenghe that in spite of the increase in COVID-19 cases in recent weeks, the government wouldn’t declare countrywide lockdowns due to the impact such lockdowns would have on the economy and society.
Rahman said that the Premier Rajapaksa’s assurance to Minister Fenghe couldn’t be taken lightly.
Responding to another query from The Island , lawmaker Rahman alleged that the government pursued a political agenda brazenly at the expense of overall safety and security of the people. The government obviously felt the need to act at last after the country reported over 2000 new cases on a daily basis over the past ten days with alarming increase in the number of deaths.
Referring to a spate of statements issued by the Government Medical Officers’ Association (GMOA) over the past couple of months, the former UNPer said that the crisis the country was experiencing could have been certainly avoided, if the powers that be acted responsibly. Instead, the government undermined Covid-19 health guidelines by encouraging public gatherings, MP Rahman said. The MP said that the April Covid-19 cluster was nothing but a creation of the SLPP government now blaming the public for the crisis.
Rahman said that though the government referred to a countrywide lockdown it was actually a curfew. Asked whether the SJB as the main Opposition party that backed such measures regardless of difficulties caused to the public, the Colombo District MP said that when it came to the country’s interest there couldn’t be a dispute over the required harsher strategy. However, arrogant SLPP leadership should learn, at least now to seek a national consensus on not only a strategy to meet both the daunting Covid-19 challenge as well as post-pandemic scenario.
The national economy that had been in severe difficulty due to waste, corruption, irregularities, mismanagement and shortcomings was now in such a critical situation due to Covid-19 fallout, the country needed a common agenda, MP Rahman said. Unfortunately, the SLPP, had never followed expert advice much to the discomfort of those who believed in a sensible approach, he said. Asked to comment on a shortfall of 600,000 covishield doses for those who needed the second jab, MP Rahman emphasized the government owed an explanation why 927,000 were given the first dose when the country received only 1,264,000 in three separate consignments from India.
Who decided to continue the first covishield round till April 6th, thereby created a wholly unnecessary problem? MP Rahman asked.
The SJB spokesperson said that the government struggled to cover up its failure. Referring to various statements attributed to different government spokespersons and those who serve the interests of the SLPP, in this regard, MP Rahman said the bottom line is that uncertainty gripped over 600,000 people.
MP Rahman appreciated GMOA and GMOF (Government Medical Officers’ Forum) quite rightly pointing out those who received covishield couldn’t receive second jab by way of Sputnik V or the Chinese vaccine in the absence of proper study into such ‘mix-match’. But, that didn’t prevent Co Cabinet spokesman Udaya Gammanpila declaring the possibility of vaccine ‘mix-match.’
Rahman reminded that the second jab would have to be administered between 12-16 weeks after the first. The SJB MP asked the government to issue an official statement in that regard without further delay.
The UNPer said that the SLPP, in spite of winning 2019 presidential and 2020 parliamentary elections with a commanding majority in parliament was struggling to cope up with a spate of issues. The crisis caused due to the mismanagement of the rampaging pandemic was one issue at hand but definitely not the only problem, the MP said.
Asked whether the SJB was trying to exploit the situation regardless of the consequences, Rahman said that the SLPP should accept the responsibility for the situation.
Having won two national elections, the SLPP, instead of seeking a consensus on a national agenda, enacted the 20th Amendment at the expense of the 19th brought in with the backing of over 200 lawmakers, MP Rahman said. Enactment of a new law meant to suppress democratic opposition through vile means and fighting an epidemic two different things, the MP asserted, urging the government to review the overall strategy.
Let the government strategy depend on nothing but sound medical advice backed by political will, Rahman said.
Commenting on accusation directed at Transport Minister and SLPP heavyweight Gamini Lokuge regarding his May Day intervention in lifting of ‘Piliyandala lockdown,’ lawmaker Rahman said that the government explained how a specific directive issued by the Director General of Health Services (DGHS) Dr Asela Gunawardena was countermanded. Who took responsibility for the subsequent deterioration of the situation in Piliyandala area? the MP asked. The situation therein should be examined against the backdrop of the government deploying police to carryaway those who walked about with improperly clad facemasks on the basis they undermined public health. The government conveniently ignored its much touted “One Country, One Law’ slogan, the former UNPer said.
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Personal income tax shock dims economic activities

ECONOMYNEXT –Sri Lanka’s personal income tax hikes have hit economic activity in the first quarter though despite currency stability helped businesses cut prices, Hemas Holdings, a top consumer goods group has said.As the currency stabilized, as central bank ended contradictory money and exchange policy conflicts, businesses had cut prices. Mainstream economists generally claim that price falls lead to delayed transactions and try to generate positive inflation through money printing, though businesses believe otherwise.
“The market witnessed price reductions and promotional trade schemes to stimulate consumption,” Hemas Holding told shareholders in the March quarterly statement.
“However, changes made to the personal income tax structure severely impacted modern trade sales volumes as consumers rationalised their purchases under reduced disposable income levels.”
Sri Lanka hiked personal income tax rates in 2023. Value added taxes were raised to 15 percent from 8 percent last year. Another 2.5 percent cascading tax was imposed on top of VAT, the effect of which was estimated to be around 4.5 or more through the cascading effect.
While value added tax allows the government to get tax revenues after citizens make transactions and getting the economy to work, based on best decisions needed to drive the economy to satisfy real needs, income tax kills economic decisions and transfers money to state actors, analysts say.
Net gains on income tax therefore comes at a cost of lost value added tax as well as killed real economic activities which would otherwise have been based on decisions of those who earned the money.
UK also almost doubled VAT in 1979, also to 15 percent, cut the base income tax rate and widened thresholds above inflation to give choice to individuals, amid criticism from Keynesian style or mainstream economists to recover the economy, after two back-to-back IMF programs failed to deliver concrete results, analysts point out.At Hemas Holdings, group revenues went up 52.6 percent to 32 billion rupees in the March 2023 quarter from year earlier amid price inflation as the rupee fell, and cost of sales went up 45.1 percent to 22.2 billion rupees, allowing the group to boost gross profits 72 percent to 9.8 billion rupees, interim accounts showed.
However, administration costs went up 54 percent, selling and distribution costs went up 36 percent, and finance costs went up to 1.3 billion rupees. Profit after tax was flat at 1.06 billion rupees.Sri Lanka’s central bank stabilized the rupee in the second half of 2022 after the rupee collapsed from 200 to 360 to from two years of money printing and also removed a surrender rule in March allowing the exchange rate appreciate.
The US Fed also tightened policy from March 2022 helping bring down global commodity prices after triggering inflation not seen for 40 years through Coronavirus linked money printing or accommodating a real shock through monetary expansion.
“While the modern trade channels witnessed a slow down due to the adverse impact of the tax reforms and high cost of credit on the middle-class urban population, the general trade channels experienced significant growth and increased foot fall,” Hemas told shareholders.
“The decline in global commodity prices in the second half of the year, enabled the business to make price reductions across the portfolio.
“However, the benefit of appreciation of the Sri Lankan Rupee in March 2023 was not seen during the quarter due to the lag effect but is expected to realise in the quarters to come, provided the current economic conditions prevail.”
Hemas is also has operations in Bangladesh where the central bank is also buying up government securities with tenors as long at 20 years to mis-target the interest rate, triggering forex shortages and depreciating the Taka, according to analysts who study the country.
Inflation had hit 9.3 percent in Bangladesh by March.
“In the face of numerous challenges including slowdown in the global economy, depreciation in Taka, heightened inflation and depleting foreign currency reserves, the country entered an IMF programme in January 2023,” the firm said.
“The value-added hair oil market witnessed a degrowth, as consumers curbed consumption in many non-essential items and switched to value-for-money alternatives.”
Mainstream economists mis-target rates to boost growth known as either monetary stimulus or bridging an output gap, though the effort result in instability and economic contractions.
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