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Editorial

What?

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Saturday 14th September, 2024

The Cabinet of Ministers is playing Santa these days in a bid to shore up President Ranil Wickremesinghe’s chances in the ongoing presidential race. Its latest gimmick is the announcement of substantial PAYE tax reductions, which are to take effect from April 2025. The Cabinet has said the proposal to grant tax relief has the blessings of the IMF, which, we thought, was against tax cuts.

The Cabinet, headed by President Wickremesinghe, is in overdrive to announce relief measures and make as many election promises as possible ahead of the forthcoming presidential election. Its ulterior motive is not difficult to discern, and it will be interesting to see the Election Commission’s reaction. The Cabinet has also undertaken to increase the public sector salaries and pensions. Restrictions on vehicle imports, too, will be lifted from February 2025, the Cabinet has said.

Curiouser and curiouser! A couple of months ago, President Wickremesinghe, the Finance Ministry and the Cabinet insisted that a demand for public sector pay hikes could not be granted for want of funds and in view of the IMF’s stringent bailout conditions.

They stood their ground amidst workers’ protests, which were crushed. State Minister of Finance Shehan Semasinghe went on record as saying that pay hikes that trade unions demanded for state employees would require an extra Rs. 275 billion, and the value added tax would have to be jacked up from 18% to 22% to meet that demand. The Finance Ministry panjandrums and Minister Bandula Gunawardena peddled the same argument, which received wide publicity. Now, the Cabinet says it is possible to grant public workers pay hikes, and, at the same time, reduce taxes! It finds itself in a contradiction—a huge one at that.

President Wickremesinghe would have the public believe that the economic crisis is far from over, and they will have to brace for more austerity measures if the country is to come out of it; that uphill task will be attainable only under his stewardship.

Hence his warning that it will be a huge mistake for the public to elect anyone else as President next week. But he and the Cabinet are now making pledges to increase salaries, provide subsidies and relief, do away with import restrictions and reduce taxes as if the economic crisis were a thing of the past. They must be asked whether a country facing an economic crisis can afford to carry out such election pledges.

Interestingly, the Cabinet has said that for the proposed tax relief to be granted, the Inland Revenue Act will have to be amended. Reading between the lines, one will discern the subliminal message the Cabinet has conveyed; the public will have to elect Wickremsinghe as President and vote for his party or independent group to ensure that the promised tax relief becomes a reality.

Whatever the Cabinet and the President promise, out of their sheer desperation to garner votes in a tight presidential race, state revenue will have to be raised substantially to slash personal income taxes, increase the public sector salaries and enhance social welfare.

How does the Cabinet propose to meet the revenue targets set by the IMF while decreasing taxes? IMF Senior Mission Chief Peter Breuer said in June that Sri Lanka had to increase state revenue to the region of 15% of GDP in 2025. Are the proposed PAYE tax reductions a ploy to prepare the ground for the implementation of the much-dreaded imputed rental tax and increase other taxes after the presidential and parliamentary elections? The IMF and Sri Lankan politicians know more than one way to shoe a horse.



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Editorial

Exchanging ginger for chillies?

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President Anura Kumara Dissanayake told Parliament on Thursday that the Prevention of Terrorism Act (PTA) would be repealed before the end of 2026. He said the PTA, introduced as a temporary measure, had lasted for 46 long years despite calls for its abolition. It is not clear from media reports on the President’s parliamentary speech how the government will set about the task of doing away with the PTA. However, one may recall that the Ministry of Justice published a proposal for a new anti-terrorism law, the Protection of the State from Terrorism Act (PSTA) in December 2025, seeking public views.

If the government is allowed to replace the PTA with the proposed PSTA, it will be a textbook case of ‘exchanging ginger for chillies’, as a local saying goes. The solution will be as bad as or perhaps even worse than the problem.

President Dissanayake’s admission in Parliament that the PTA is draconian and his government is planning to abolish it in response to concerns expressed by human rights campaigners and other stakeholders can be considered a self-indictment; suspects continue to be arrested and detained under the PTA and Dissanayake himself signs detention orders in his capacity as the Minister of Defence. Perhaps, the JVP leaders know better than others what it is like to be arrested and detained under the PTA. They are among those who bore the brunt of this repressive law, which has been abused by successive governments whose self-righteous leaders condemn it only when they are out of power. Their hypocrisy has resulted in the perpetuation of the PTA.

Sri Lanka will incur much international opprobrium if the proposed PSTA replaces the PTA. The PSTA has already drawn heavy criticism from international human rights organisations, including the Office of the United Nations High Commissioner for Human Rights (OHCHR), which has warned that several provisions of the draft law remain inconsistent with Sri Lanka’s obligations under international human rights law. According to OHCHR’s preliminary analysis, the proposed legislation risks enabling broad criminalisation through vague definitions of terrorism, restrictions on freedom of expression, assembly and association, substantial executive powers with limited safeguards or oversight, arbitrary arrest and prolonged detention, exposure to torture, ill-treatment and enforced disappearance. OHCHR has therefore urged the government to revise the draft legislation substantially “to ensure that Sri Lanka’s counter-terrorism framework complies with international law and does not replicate the serious human rights violations associated with the PTA”.

Various human rights groups, civil society organisations, political activists and the media, too, have pointed out why the PSTA cannot be accepted as an alternative to the PTA. They have echoed OHCHR’s view that the PSTA has not defined terrorism properly, and this fact runs counter to international law. An overly broad definition allows the PSTA to be misused.

Having neutralised three formidable terrorist outfits, the LTTE, the JVP and the National Thowheed Jamaath, Sri Lanka needs robust anti-terror laws to protect itself against terrorism. Nothing must be left to chance. Similarly, all precautions must be taken to ensure that anti-terror laws do not contain structural flaws that can be abused to suppress civil liberties in the name of fighting terrorism.

The PSTA has also been criticised for seeking to empower senior police officers to issue detention orders and authorise pre-charge detention for renewable periods of up to two months for a total of up to one year. It has been pointed out by international human rights organisations, such as Amnesty International, that the PSTA has retained untrammeled executive powers; the presidential powers are so extensive that the sole avenue for appeal against Proscription Orders lies with the Executive itself so much so that they undermine the International Covenant on Civil and Political Rights (ICCPR).

The present-day leaders will do themselves a favour by abolishing the PTA, for it may be used against them when they lose power. The PTA, by its very nature, lends itself to abuse. The same is true of the proposed PSTA. Hence the pressing need to deep-six the PTA and the draft PSTA, and introduce new anti-terror laws that comply with international law.

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Editorial

Justice, hypocrisy and politics

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Saturday 27th June, 2026

Governments of all political hues in Sri Lanka usually do not uphold the foundational legal principle of the presumption of innocence when their political rivals happen to be arrested. The JVP-NPP administration has failed to be different despite its election pledge to usher in a new political culture. Its politicians and propagandists ruthlessly vilify their political opponents who are taken into custody. They apparently consider their rivals held on remand guilty until proven innocent.

The inversion of the presumption of innocence could have disastrous consequences, as evident from a large number of summary executions and political assassinations during the past armed conflicts in this country. The SLFP, the UNP and the JVP have committed the sin of physically eliminating their political opponents.

The current SLPP leaders, while they were in the SLFP-led UPFA government from 2010 to 2015, turned a parliamentary select committee into a kangaroo court against a Chief Justice, and hounded her out of office. The UNP also launched witch-hunts against upright public officials and judges and treated suspects as convicts. The JVP-led NPP has prejudged the guilt of three suspects, including former Justice Minister Wijeyadasa Rajapakshe’s son, Rakitha, and SJB organiser for Horana Charith Abeysinghe, arrested on Thursday on suspicion of seeking a bribe from the wife of a drug dealer in custody.

There is no gainsaying that the law must apply to everyone equally, and all allegations of transgressions must be probed. So, nobody should protest against the arrest of the aforementioned trio unless their legitimate rights are violated while in custody. If they are found guilty after a fair trial, stringent punishment must be meted out to them. This task is best left to learned judges. The government must not seek to gain political mileage out of their arrests. What one gathers from various statements the JVP/NPP politicians, including ministers, have been making about Rajapakshe and Abeysinghe is that the government is labouring under the misconception that they should be considered guilty simply because they have been arrested.

The SJB has suspended Abeysinghe’s party membership and launched a disciplinary inquiry. Such action is welcome. However, Abeysinghe should be given an opportunity to tell his side of the story and defend himself. The principle of natural justice must be upheld. That is how such matters are handled in the civilised world.

JVP/NPP politicians and propagandists continue to blame the SJB for having individuals with underworld links within its ranks. It should put its own house in order before telling other political parties how to deal with their members facing allegations.

Former Energy Minister Kumara Jayakody has been indicted for corruption before the Colombo High Court. The JVP/NPP unashamedly defended him to the hilt when the Opposition moved a motion of no confidence against him in Parliament. He stepped down when it became too embarrassing for the government to keep him in the Cabinet. What action has the JVP/NPP taken against him over charges of corruption? Has it at least held a disciplinary inquiry against him? Why hasn’t it suspended his party membership?

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Editorial

Falling oil prices and fallen heroes

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Friday 26th June, 2026

The whole world is enjoying the benefits of the US-Iran peace deal. Vessel traffic has more than doubled via the Hormuz Strait over the past 36 hours or so, bringing oil prices down steeply, according to media reports. Predictions that oil prices would not return to the pre-conflict levels in the foreseeable future have gone wrong.

World oil prices have come down almost to the pre-Iran war levels, with the global benchmark Brent crude dropping below USD 72.48 a barrel, described as the price it was at the day before the launch of the US-Israel attacks on Iran on 28 Feb., and settling at USD 72.63 per barrel. The US benchmark West Texas Intermediate (WTI) fell below USD 70 per barrel. These are very positive signs. Oil price decreases have stood all economies in good stead.

Some countries, such as the US, Australia and Pakistan, have opted for partial pass-throughs causing pump prices to drop, much to the relief of consumers who were reeling from the inflated fuel costs for more than three months. They have managed to cool inflation to some extent. But Sri Lankans are not that lucky. At the time of going to press, the JVP-NPP government had not decided to lower fuel prices; it was only trotting out various excuses for the so-called lag phase while pressure was mounting on it to reduce fuel prices at least partially. Sri Lanka’s fuel pricing has shown a rockets-and-feathers pattern under successive governments.

The JVP-NPP government did not scruple to opt for an immediate asymmetric cost pass-through when world oil prices increased. It allegedly resorted to price gouging by revaluing oil inventories, procured at lower costs, at prevailing market prices. When the Iran war erupted in late February, the government declared that the country’s fuel stocks were sufficient for several months, but it increased fuel prices immediately afterwards in keeping with global oil price hikes. Thus, it gets the best of both worlds by making fuel prices cost-reflective only when world oil prices rise. It is continuing the policies of the SLPP-UNP government, which it condemned for exploiting the public.

During their opposition days, the JVP/NPP leaders claimed that a government that increased local fuel prices whenever world oil prices rose was not worth its salt; it was a simple task that even a Pettah trader was equal to, they argued. They are now doing exactly what they flayed the previous governments for.

The Opposition has accused the government of keeping fuel prices unconscionably high to recover the staggering losses caused by the coal procurement scam, which has made the diesel-fired power plants operate overtime to compensate for a generation loss at Norochcholai. The Ceylon Petroleum Corporation has admitted that it had to buy some diesel shipments at prices as high as USD 286 per barrel to prevent supply disruptions. What has driven the demand for diesel high is the country’s overdependence on diesel-fired power plants to avoid power cuts.

Meanwhile, private bus operators, who secure fare hikes whenever diesel prices increase significantly, have argued that the operational and regulatory framework involving them and the National Transport Commission does not require them to lower bus fares when diesel prices decrease. If so, the government ought to introduce new laws and regulations to ensure that bus fares reflect diesel price decreases to prevent asymmetric pricing, for fuel is a major cost input in the transport sector.

If the JVP/NPP leaders were in the Opposition today, they would take to the streets demanding fuel price reductions. While out of power, they promised to champion the cause of the poor and resist injustice with might and main, just like Robin Hood and his Merry Men, but once in power, they are accused of behaving like Prince John and Sheriff of Nottingham; they are increasing taxes and enforcing compliance ruthlessly, besides jacking up tariffs. Such a hero-to-villain transformation usually carries significant political costs. No wonder the government is reluctant to face the Provincial Council elections.

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