It is very clear at present that the new income tax net cast by the Ranil Wickremesinghe government has provoked a situation that may well become unmanageable and ominous signs of this are clearly emerging. Strident protests from groups including doctors, university academics and others including port and airport employees and many others have been becoming increasingly strident over the past several days. Hints of direct trade union action, obviously meaning strikes, have been made. Whether a government, already on the back foot following Inter University Students’ Federation (IUSF) Convenor Vasantha Mudalige’s release on bail and angry public opinion railing against blatant efforts to postpone the scheduled local elections. can fend off the tax protests remains to be seen.

All those protesting on this account well know that the government is desperately cash strapped and needs to urgently harness revenue to keep the wheels of state turning. On its part, the government also is too well aware of the inability of most of the protesters to bear the new income tax burden in the face of galloping inflation, particularly food, electricity and a host of other goods and services are concerned. But there is very little that it can do about it. Wickremesinghe’s and his government’s obdurate refusal to abandon or cut down on Saturday’s 75^th Independence anniversary bash, said to have cost Rs. 200 million, has only aggravated public fury about the new income tax burden placed upon the people.

The very small number of personal income tax payers in this country have always felt unfairly treated, believing they have been singled out for harsh treatment while the vast majority remained untouched. They could not be more wrong. All the people of the country pay taxes and how! As one famous newspaper editor of the past pungently put it, “every time you strike a match or flush the toilet, you are paying a tax.” We all know the platitude that the only thing that is certain in life is death and taxes. Indirect taxes unlike those that are direct (like income tax) by far account for the lion’s share of tax revenue. Populations of developed countries, particularly in Europe and North America, pay high income taxes. But they, unlike us in Sri Lanka, get good returns for what they pay. We, in this land like no other, can only grin cynically when we see signs proclaiming “Your tax rupees at work” at road digs and construction sites and think “like hell” to ourselves.

Equity is a basic principle of taxation long ignored in this country. Go back to 1977 and the early years of opening our long shackled economy by the J.R. Jayewardene government with Ronnie de Mel as finance minister. That was when public service emoluments were freed of income tax on the argument that top public servants were paid much less than their private sector counterparts and this hindered government’s ability to hold competent managers in the public sector hierarchy. The contention was not altogether without merit but there were many fallacies as well. Public servants from the colonial days have enjoyed non-contributory pensions which is not the case (with very few exceptions) in the private sector. Dr. N.M. Perera, as finance minister in Mrs. Bandaranaike’s United Front government of 1970 tried, without success, to withdraw the pension benefits from new entrants to the public service. He sensibly proposed that they be paid a retirement benefit like what is offered by the EPF to private sector employees with contributions from both employer and employee. The failure of this effort has left a ticking time bomb on the taxpayer’s lap to this day.

At a post-budget press conference following freeing public sector salaries from income tax, then Finance Minister De Mel was asked whether parliamentary emoluments too would be similarly exempted. He ducked the question saying “that hasn’t been decided yet.” Of course the benefit was extended to MPs too. Cabinet Spokesman Bandula Gunawardene told a post-cabinet news briefing a few days ago said that the IMF wanted all those earning Rs. 45,000 a month to be made liable to income tax. The government tried its best to push it to a monthly Rs. 150,000 and finally settled at Rs. 100,000. There were those who didn’t believe the minister on the premise that an institution like the IMF would not have got into micro details but would have broadly prescribed a percentage of GDP that must be gathered as tax revenue. However it wasn’t long before the president himself confirmed Gunawardene’s claim.

There’s no avoiding the reality that Sri Lanka’s income tax base is far too narrow and needs to be widened substantially. This would mean that people who have never paid income tax would caught up in the tax net and would deeply resent being compelled to pay. This is particularly so in the context of the value of money reducing sharply, most so in recent months. The country is also saddled with an Inland Revenue Department entrenched in a tradition of harassing already squeezed lemons to increase tax collection in a society where evasion is widely prevalent, often among professionals who should know better. The government must also be cognizant of the untaxed, lavish non-cash benefits of politicians deeply resented by the people. However that be, whether the government will be allowed to implement the announced scheme or be compelled to backpedal remains to be seen.

Saturday 4th February, 2023

The SLPP-UNP regime is celebrating ‘Independence’ on a grand scale today while trifling with people’s sovereignty, which includes the power of government, fundamental rights and franchise. It makes no bones about the fact that it is all out to delay the local government elections and deprive the public of an opportunity to exercise their franchise. It is pulling out all the stops in a bid to throttle the electoral process by denying the Election Commission funds for conducting the mini polls scheduled for 09 March.

The government is doing exactly the opposite of what the SLPP promised in its manifestos presented to the public before the 2019 presidential election and the 2020 parliamentary polls. It does not heed public opinion at all and bulldozes its way through. Sovereignty resides in the people and all government authority emanates from them, and therefore they must be able to exercise their right to vote and thereby express their opinion on how the country is being governed. A regime that undermines people’s power of government and franchise cannot be considered democratic.

The SLPP-UNP government also stands accused of violating people’s fundamental rights. Convener of the Inter-University Students’ Federation Wasantha Mudalige, who was released on bail recently, has levelled a very serious allegation against the government. He says an attempt was made to kill him while he was in police custody. Besides, it has now been revealed that he was wrongfully arrested under the Prevention of Terrorism Act (PTA); the Colombo Magistrate’s Court has cleared him of charges pressed against him under the PTA. He is planning to file a fundamental rights violation petition against the police and others responsible for pressing trumped-up charges against him and his illegal detention under the PTA.

The incumbent dispensation has thus proved that it does not care two hoots about the people’s fundamental rights, power of government and franchise. It is therefore without any legitimacy to exercise people’s legislative, executive and judicial powers.

Mudalige’s serious allegations against the police evoke one’s dreadful memoires of the reign of terror in the late 1980s, when abductions, torture, disappearances and extrajudicial killings were the order of the day. The politicians and their hired guns who committed heinous crimes in the name of counterterrorism, in that era, and some former southern terrorists and their hit squad members are still around.

Old habits are said to die hard. It is being argued in some quarters that the wave of retaliatory violence that swept across the country following SLPP goon attacks on the Galle Face protesters on 09 April 2022 bore the hallmarks of southern terrorism the country witnessed in the 1987-89 period; widespread arson attacks on the ruling party politicians’ properties were well-coordinated and swift; they were far from spontaneous, and the same is true for the abortive attempt to take over Parliament in July last year. The UNP, which unleashed barbaric counterterrorism, is in power, and the JVP is threatening to launch a wave of protests if the mini polls are postponed.

It is said that those who do not learn from history are doomed to repeat it. The J. R. Jayewardene government made a colossal blunder by doing away with the 1982 general election, and holding a heavily-rigged referendum, instead, to retain its five-sixths majority in Parliament. Its interference with the country’s electoral process intensified public anger, which the JVP effectively tapped to fuel its second insurrection. The youth were resentful and rose against the repressive regime. Mahinda Rajapaksa took up the cudgels for the rights of the victims of state terror and returned to national politics in the late 1980s. But today, his party, the SLPP, and the UNP have closed ranks, and are apparently creating conditions for another conflagration.

If a general election had been held in 1982, that would have helped defuse tensions and release pressure in the polity, and the JVP would not have had a casus belli to take up arms and mobilise the youth.

One can only hope that the local government polls will be held as scheduled and the people provided with an opportunity to give vent to their anger democratically and jolt the government into making a course correction so that the country will not witness another catastrophe.

Friday 3rd February, 2023

Sri Lankan political leaders exude ‘patriotism’ from every pore. These rotund grandees never miss an opportunity to suck in their stomachs, puff out their chests and sing the national anthem with gusto, making as they do a public display of their brand of patriotism. We will see them in action again tomorrow, when they are celebrating what the country does not have—independence—on a grand scale.

Prime Minister Dinesh Gunawardena has, in what may be considered an outburst of patriotism with nationalism thrown in for good measure, ordered that the use of the place name, ‘Slave Island’ for ‘Kompagngna Veediya’ be discontinued immediately on account of the country’s 75th anniversary of Independence. He has decreed that ‘Kompagngna Veediya’ be used in all three languages—Sinhala, Tamil and English. Curiously, it seems to have escaped the Prime Minister’s attention that successive governments have turned the entire country into a ‘slave island’ of sorts. The incumbent dispensation has presided over the completion of the process of the country’s enslavement, which gathered momentum after the 1977 regime change and received a boost from every government thereafter.

PM Gunawardena is known for wrapping himself in the flag and his fiery oratory replete with patriotism and nationalism. He has, in his wisdom, defended the government’s decision to spend the country’s scarce resources to the tune of Rs. 200 million on tomorrow’s Independence Day extravagance in the name of patriotism. These funds could have been utilised to buy medicines and food for the sick in government hospitals.

The PM finds himself in the exalted company of a bunch of politicians who made preparations for a grand ceremony to mark the quincentennial of the arrival of the Portuguese here. Thankfully, the UNP-led UNF government was dislodged in 2004, and the event did not come to pass. So much for the present-day leaders’ love for the country and its independence!

Thanks to decades of economic mismanagement, waste, corruption, abuse of power and reckless borrowing under successive governments led by the ‘patriotic’ leaders of all political hues, the country has become a bankrupt vassal state, which has to take orders from other nations. It has to do what is good for others at the expense of its national interest and is now under Indian pressure to ensure the full implementation of a constitutional amendment that New Delhi rammed down its throat in late 1980s. When President Ranil Wickremesinghe undertook to implement the 13th Amendment fully, at a recent party leaders’ meeting, Gunawardena, who was present there, chose to remain silent!

The Mahinda Rajapaksa government, in which Gunawardena was a key figure, stood accused of turning the country into a ‘Chinese colony’ much to the consternation of India and the western powers that are averse to the rise of the Dragon. The current administration has made it a lackey of the US-led Quad (Quadrilateral Security Dialogue). When China got the Hambantota Harbour in return for a loan, the US media said Sri Lanka had been made to cough up a port. But the country has since been made to cough up a container terminal, an oil tank farm, etc., in return for financial aid, but those deals have not made headlines internationally!

Has the SLPP-UNP government, which is averse to a part of the Colombo City being called ‘Slave Island’, forgotten that the country is heavily dependent on remittances from its women reduced to slavery in West Asia. It is also the sweat and tears of women slaving away for paltry wages on estates and in factories here that fuel the export sector, bringing in much-needed forex, with which the super luxury vehicles carrying the government politicians to the venue of the Independence Day ceremony, today, have been purchased.

Let the self-proclaimed patriots in the current regime be told that they cannot hoodwink the public.