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Will the 2022 Budget herald changes for the better?

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By Sanjeewa Jayaweera

The newly appointed Finance Minister will present the Budget for 2022 on November 12, 2022. Over the years, the public has come to expect concessions whenever a Budget is presented. The corporate sector usually canvasses for the corporation tax rate to be reduced and various incentives to facilitate new investments and expand current operations. Those employed in the private sector hope that the single person tax-free allowance will be increased and a reduction in the income tax rate. Those employed in the public sector and those who have retired hope for salary and pension increments whilst consumers pray that the Value-Added Tax (VAT) rate and other taxes and import duties will be reduced so that prices of goods might be reduced. Only those who consume liquor and smoke cigarettes know that they will not receive any “gifts” from the Budget!

The tax concessions granted soon after President Gotabaya Rajapaksa was elected delivered most of the manifesto promises. The VAT rate was reduced from 15 percent to eight per cent, whilst the Nation Building Tax (NBT) levied at two per cent was abolished. In addition, the single person tax-free tax allowance for a year given to individuals, was increased to Rs. 3 million from Rs. 500,000. To be precise, for those who received employment income, the tax-free allowance was Rs. 1.2 million before the increase. Employees subjected to Pay As You Earn (PAYE) tax which required the employer to deduct the tax when paying salaries, were granted an exemption and told to pay the tax directly to the Department of Inland Revenue every quarter. The five per cent withholding tax (WHT) deducted when banks and finance companies paid interest income was abolished. The tax was only to be paid in case the total income exceeded Rs. 3 million for the year. The tax if due was to be remitted every quarter. The corporation tax rate was reduced to 18 per cent from 28 per cent for those engaged in manufacturing. Businesses whose turnover was less than Rs. 300 million for a year were exempted from VAT. The turnover threshold for VAT exemption previously was Rs. 30 million.

The GOSL did not disclose the anticipated reduction in revenue due to these concessions, nor did they announce how they intended to bridge the shortfall in revenue. However, there was an assumption that the tax concessions granted would increase aggregate demand for goods and services and increase the overall size of the economy.

Although many Sri Lankans were happy with the concessions granted, those knowledgeable in economics and finance were surprised and concerned. In a country where most people are exempted from direct taxation, and many required to pay, did not comply with the law, these concessions were considered illogical and ill-timed.

International rating agencies were swift to react to these concessions by downgrading the credit rating of the country. The credit rating applies to the outlook on Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating (IDR). The rating agencies justified their negative sentiment by stating that the significant revenue reduction would weaken the ability of the GOSL to repay debt. The Treasury and the Central Bank of Sri Lanka released statements sharply rebuking the rating agencies for the downgrade.

Those surprised and concerned by these concessions were so because there was no logic and was in essence against economic and financial commonsense. In an article of mine published in the Sunday Island of January 12, 2020, captioned “Sri Lanka’s Tax Conundrum”, I did raise some questions about the assumption that the tax concessions would benefit the poor and drive aggregate demand.

The GOSL was reducing revenue when there was a significant budget deficit and accentuating the problem; there was no action to reduce public expenditure. Instead, it was announced that 100,000 unemployed graduates are to be employed in the already bloated state sector. In addition, the country’s accumulated debt was high as successive governments since independence had acted irresponsibly.

The GOSL is partly correct in attributing the current economic crisis to the pandemic. There is no doubt that there has been a severe economic upheaval worldwide due to the pandemic. Most economies have contracted to cause unemployment and a lot of misery to many. Having said that, many developed and developing countries have begun to bounce back, and there is optimism that we will overcome the pandemic. However, in Sri Lanka, the economy has still not started to recover. We are facing multiple challenges on several fronts. Government revenue reduced significantly due to the various tax concessions granted in 2020 has been further reduced as the economy has contracted. The country is in the midst of a severe foreign exchange crisis. The majority of consumers are finding it challenging to manage as prices of commodities are skyrocketing. That this is a global problem is of no comfort to those who cannot finance their expenses.

In light of the challenges mentioned above, what can we expect from the 2022 Budget? According to press reports, the newly appointed Finance Minister is quoted to have said that “There is nothing to give to the public but only to take back some of the concessions given.” I may not have repeated what he has stated precisely, but I hope I have accurately conveyed his message. As usual, the comment has drawn criticism from both the Opposition parties and some in the government. Those in the Opposition who have experience in governing the country, know well that there is no alternative. On the other hand, those who have never been involved in governing the country and those driven by misplaced ideology will protest and mislead the public.

I, for one, agree with what the Finance Minister is quoted to have said. There is a need to roll back all tax concessions granted in 2020 and reduce public expenditure. I am confident that many would disagree with me and say that this is not the time to tighten our belts. I agree that increasing tax rates and a cut in public expenditure would result in hardship to many. However, there is no alternative. The Central Bank of Sri Lanka (CBSL) has been printing money in the last few years. A retired Deputy Governor of the CBSL has stated that the recently resigned Governor, Professor Lakshma, converted the CBSL to a printing press! Suppose corrective action is not taken this time around to introduce much needed economic reforms, revenue-enhancing measures and cut down expenditure; the GOSL may well be taking the country down a path that has impacted Zimbabwe and Lebanon.

I hope the President, the Finance Minister, the Prime Minister, and the Cabinet have the foresight and courage to introduce meaningful changes in managing the economy and finances of our country. That we all need to tighten our belts considerably is a given. However, it is time that difficult and unpopular decisions are taken for the country’s medium and long-term good, and winning the next election should not be a consideration.

A significant quote attributed to the late Singaporean Prime Minister Lee Kuan Yew, who said that “elections in Sri Lanka is an auction of non-existent resources.” Maybe we need to now replace the word “Elections” with “Budget.”



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Features

Is it impossible to have hope?

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So, a woman has lost again to a man. I refer here to Matale District SJB MP Rohini Kaviratne having to concede her bid for Deputy Speaker of Parliament to some bod of the Pohottu Party, who, sad to say makes only a negative impression on Cass. Conversely, Kaviratne looks competent, capable, trustworthy, able to communicate and command, and most importantly speaks and conducts herself well balanced. So different from most of the MPs, particularly of the government side, who lack education, and in appearance and behaviour – decency. Please, take my word for the fact that I am not a party person. What I want in our representatives is education and decorum. And they should at least once in a while use their own heads and make decisions that are good for the country and not follow the leader through sheep like, sycophantic obedience. Of course, even more than this is self interest that prompts the way they act and decisions are taken, especially at voting times.

Rohini Kaviratne made a bold statement when, as Wednesday’s The Island noted, she told Parliament “the government was neither run by the President nor the Prime Minister but by a ‘crow.’” Utterly damning statement but totally believable. Deviousness as well as self-preservation is what motives action among most at the cost of even the entire country. And, of course, we know who the crow is – kaputu kak kak. Cass lacks words to express the contempt she feels for the black human kaputa, now apparently leading the family of kaputas. Why oh why does he not depart to his luxury nest in the US of A? No, he and his kith are the manifestation of Kuveni’s curse on the island. Strong condemnation, but justified.

You know Cass had a bold kaputa – the avian kind – coming to her balcony in front of her bedroom and cawing away this morning. Normally, she takes no notice, having developed sympathetic companionship towards these black birds as fellow creatures, after reading Elmo Jayawardena’s Kakiyan. She felt sorry for the crow who cawed to her because his name has been taken to epithet a politico who landed the entire country in such a mess. And he is bold enough to attend Parliament. Bravado in the face of detestation by the majority of Sri Lankans! Cass did not watch afternoon TV news but was told father and son, and probably elder brother and his son attended Parliamentary sessions today – Wednesday May 18. May their tribe decrease is the common prayer; may curses rain on them. Cass recognises the gravity of what she says, but reiterates it all.

I am sure Nihal Seneviratne, who recently and in 2019, shared with us readers his experiences in Parliament, moaned the fact that our legislature always lacked enough women representation. Now, he must be extra disappointed that political allegiance to a party deprived Sri Lanka of the chance of bringing to the forefront a capable woman. Women usually do better than men, judging by instances worldwide that show they are more honest and committed to country and society. The two examples of Heads of Government in our country were far from totally dedicated and commitment to country. But the first head did show allegiance to Ceylon/Sri Lanka in fair measure.

As my neighbour moaned recently: “They won’t allow an old person like me, after serving the country selflessly for long, to die in peace.” Heard of another woman in her late 80s needing medical treatment, mentally affected as she was with utter consternation at the state of the country. One wonders how long we can be resilient, beset on every side by dire problems. But our new Prime Minister was honest enough to voice his fears that we will have to go through much more hardship before life for all Sri Lankans improves.

Thus, my choice of pessimistic prediction as my title. Will we be able to hope for better times? Time will be taken but is it possible to have even a slight glimmer of hope for improvement?

There is much debate about the appointment of Ranil W as PM. We admire him for his knowledge and presence. But the greatest fear is he will defend wrong doers in the R family. Let him be wise, fair and put country before saving others’ skins. He has to be praised for taking on the responsibility of leading the country to solvency. He said he will see that every Sri Lankan has three meals a day. May all the devas help him! The SJB, though it refuses to serve under a R Prez, has offered itself to assist in rebuilding the nation. Eran, Harsha, and so many others must be given the chance to help turn poor wonderful Sri Lanka around. And the dedicated protestors, more so those in Gotagogama, still continue asking for changes in government. Bless them is all Cass can say at this moment.

Goodbye for another week. hoping things will turn less gloomy, if brightness is impossible as of now.

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Lives of journalists increasingly on the firing line

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Since the year 2000 some 45 journalists have been killed in the conflict-ridden regions of Palestine and senior Al Jazeera journalist Shireen Abu Akleh was the latest such victim. She was killed recently in a hail of bullets during an Israeli military raid in the contested West Bank. She was killed in cold blood even as she donned her jacket with the word ‘PRESS’ emblazoned on it.

While claims and counter-claims are being made on the Akleh killing among some of the main parties to the Middle East conflict, the Israeli police did not do their state any good by brutally assaulting scores of funeral mourners who were carrying the body of Akleh from the hospital where she was being treated to the location where her last rites were to be conducted in East Jerusalem.

The impartial observer could agree with the assessment that ‘disproportionate force’ was used on the mourning civilians. If the Israeli government’s position is that strong-arm tactics are not usually favoured by it in the resolution conflictual situations, the attack on the mourners tended to strongly belie such claims. TV footage of the incident made it plain that brazen, unprovoked force was used on the mourners. Such use of force is decried by the impartial commentator.

As for the killing of Akleh, the position taken by the UN Security Council could be accepted that “an immediate, thorough, transparent and impartial investigation” must be conducted on it. Hopefully, an international body acceptable to the Palestinian side and other relevant stakeholders would be entrusted this responsibility and the wrong-doers swiftly brought to justice.

Among other things, the relevant institution, may be the International Criminal Court, should aim at taking urgent steps to end the culture of impunity that has grown around the unleashing of state terror over the years. Journalists around the world are chief among those who have been killed in cold blood by state terrorists and other criminal elements who fear the truth.

The more a journalist is committed to revealing the truth on matters of crucial importance to publics, the more is she or he feared by those sections that have a vested interest in concealing such vital disclosures. This accounts for the killing of Shireen Abu Akleh, for instance.

Such killings are of course not unfamiliar to us in Sri Lanka. Over the decades quite a few local journalists have been killed or been caused to disappear by criminal elements usually acting in league with governments. The whole truth behind these killings is yet to be brought to light while the killers have been allowed to go scot-free and roam at large. These killings are further proof that Sri Lanka is at best a façade democracy.

It is doubtful whether the true value of a committed journalist has been fully realized by states and publics the world over. It cannot be stressed enough that the journalist on the spot, and she alone, writes ‘the first draft of history’. Commentaries that follow from other quarters on a crisis situation, for example, are usually elaborations that build on the foundational factual information revealed by the journalist. Minus the principal facts reported by the journalist no formal history-writing is ever possible.

Over the decades the journalists’ death toll has been increasingly staggering. Over the last 30 years, 2150 journalists and media workers have been killed in the world’s conflict and war zones. International media reports indicate that this figure includes the killing of 23 journalists in Ukraine, since the Russian invasion began, and the slaying of 11 journalists, reporting on the doings of drug cartels in Mexico.

Unfortunately, there has been no notable international public outcry against these killings of journalists. It is little realized that the world is the poorer for the killing of these truth-seekers who are putting their lives on the firing line for the greater good of peoples everywhere. It is inadequately realized that the public-spirited journalist too helps in saving lives; inasmuch as a duty-conscious physician does.

For example, when a journalist blows the lid off corrupt deals in public institutions, she contributes immeasurably towards the general good by helping to rid the public sector of irregularities, since the latter sector, when effectively operational, has a huge bearing on the wellbeing of the people. Accordingly, a public would be disempowering itself by turning a blind eye on the killing of journalists. Essentially, journalists everywhere need to be increasingly empowered and the world community is conscience-bound to consider ways of achieving this. Bringing offending states to justice is a pressing need that could no longer be neglected.

The Akleh killing cannot be focused on in isolation from the wasting Middle East conflict. The latter has grown in brutality and inhumanity over the years and the cold-blooded slaying of the journalist needs to be seen as a disquieting by-product of this larger conflict. The need to turn Spears into Ploughshares in the Middle East is long overdue and unless and until ways are worked out by the principal antagonists to the conflict and the international community to better manage the conflict, the bloodletting in the region is unlikely to abate any time soon.

The perspective to be placed on the conflict is to view the principal parties to the problem, the Palestinians and the Israelis, as both having been wronged in the course of history. The Palestinians are a dispossessed and displaced community and so are the Israelis. The need is considerable to fine-hone the two-state solution. There is need for a new round of serious negotiations and the UN is duty-bound to initiate this process.

Meanwhile, Israel is doing well to normalize relations with some states of the Arab world and this is the way to go. Ostracization of Israel by Arab states and their backers has clearly failed to produce any positive results on the ground and the players concerned will be helping to ease the conflict by placing their relations on a pragmatic footing.

The US is duty-bound to enter into a closer rapport with Israel on the need for the latter to act with greater restraint in its treatment of the Palestinian community. A tough law and order approach by Israel, for instance, to issues in the Palestinian territories is clearly proving counter-productive. The central problem in the Middle East is political in nature and it calls for a negotiated political solution. This, Israel and the US would need to bear in mind.

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Doing it differently, as a dancer

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Dancing is an art, they say, and this could be developed further, only by an artist with a real artistic mind-set. He must be of an innovative mind – find new ways of doing things, and doing it differently

According to Stephanie Kothalawala – an extremely talented dancer herself – Haski Iddagoda, who has won the hearts of dance enthusiasts, could be introduced as a dancer right on top of this field.

Stephanie

had a chat with Haski, last week, and sent us the following interview:

* How did you start your dancing career?

Believe me, it was a girl, working with me, at office, who persuaded me to take to dancing, in a big way, and got me involved in events, connected with dancing. At the beginning, I never had an idea of what dancing, on stage, is all about. I was a bit shy, but I decided to take up the challenge, and I made my debut at an event, held at Bishop’s College.

* Did you attend dancing classes in order to fine-tune your movements?

Yes, of course, and the start was in 2010 – at dancing classes held at the Colombo Aesthetic Resort.

* What made you chose dancing as a career?

It all came to mind when I checked out the dancing programmes, on TV. After my first dancing programme, on a TV reality show, dancing became my passion. It gave me happiness, and freedom. Also, I got to know so many important people, around the country, via dancing.

* How is your dancing schedule progressing these days?

Due to the current situation, in the country, everything has been curtailed. However, we do a few programmes, and when the scene is back to normal, I’m sure there will be lots of dance happenings.

* What are your achievements, in the dancing scene, so far?

I have won a Sarasavi Award. I believe my top achievement is the repertoire of movements I have as a dancer. To be a top class dancer is not easy…it’s hard work. Let’s say my best achievement is that I’ve have made a name, for myself, as a dancer.

* What is your opinion about reality programmes?

Well, reality programmes give you the opportunity to showcase your talents – as a dancer, singer, etc. It’s an opportunity for you to hit the big time, but you’ve got to be talented, to be recognised. I danced with actress Chatu Rajapaksa at the Hiru Mega Star Season 3, on TV.

* Do you have your own dancing team?

Not yet, but I have performed with many dance troupes.

* What is your favourite dancing style?

I like the style of my first trainer, Sanjeewa Sampath, who was seen in Derana City of Dance. His style is called lyrical hip-hop. You need body flexibility for that type of dance.

* Why do you like this type of dancing?

I like to present a nice dancing act, something different, after studying it.

* How would you describe dancing?

To me, dancing is a valuable exercise for the body, and for giving happiness to your mind. I’m not referring to the kind of dance one does at a wedding, or party, but if you properly learn the art of dancing, it will certainly bring you lots of fun and excitement, and happiness, as well. I love dancing.

* Have you taught your dancing skills to others?

Yes, I have given my expertise to others and they have benefited a great deal. However, some of them seem to have forgotten my contribution towards their success.

* As a dancer, what has been your biggest weakness?

Let’s say, trusting people too much. In the end, I’m faced with obstacles and I cannot fulfill the end product.

* Are you a professional dancer?

Yes, I work as a professional dancer, but due to the current situation in the country, I want to now concentrate on my own fashion design and costume business.

* If you had not taken to dancing, what would have been your career now?

I followed a hotel management course, so, probably, I would have been involved in the hotel trade.

* What are your future plans where dancing is concerned?

To be Sri Lanka’s No.1 dancer, and to share my experience with the young generation.

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