Marikkar says new tax proposals disproportionate; Govt. lacks confidence of donors

By Darshana Abayasingha

Main Opposition the Samagi Jana Balawegaya (SJB) Colombo District Parliamentarian S. M. Marikkar yesterday said that the new tax proposals announced by Prime Minister Ranil Wickremesinghe are “disproportionate” and alleged that donor countries do not have confidence on the interim-Government.

“We agree that tax policies need to be revised upwards and that Government revenue must be enhanced. But this must be done in a proportional manner, and the same cannot apply to rich and poor segments. Where is the promised $ 3 billion in relief? We need to move to reduce the fuel and gas queues to provide some relief to the people. There needs to be power. This would help attract tourists back to the country and bring in about $ 300 million every month. We need to bring about 25 fuel tankers to create this stability. If Wickremasinghe cannot find the dollars to do that there is no point in his talking and what is the use of his said international relations,” Marikkar told a media briefing.

He said reduced taxes in 2019 provided significant savings to big businesses and friends of the regime under President Gotabaya Rajapaksa and the tax measures presented this week by the Prime Minister will place onus of its recovery on the masses. 

“The Government suffered colossal losses in revenue due to the tax breaks provided in 2019, and many friends of the regime benefitted by these moves. They provided over $ 800 million in benefits to their cronies and resorted to money printing. These contributed significantly to the breakdown of the economy, it wasn’t merely because of the pandemic and drop in tourism. Now the Prime Minister has lowered the income tax threshold. From 1 October if someone buys an apartment, they must pay 12% more. VAT has been increased from 8% to 12% and this will apply to the village boutique just as much as supermarkets. Wickremasinghe rescued the Rajapaksas and are now moving to recover the losses from poor people.”

Marikkar said the SJB queries if the Prime Minister and the Government gave due consideration to the sufferings of poor people when introducing these taxes due to the unprecedented economic pressures, as people’s incomes have not increased in any manner. He asked why increased taxes have not been placed on higher income groups, and some relief provided to lower segments. 

He added that aid agencies and countries will provide humanitarian assistance irrespective of who was in power, and the real test lies in the ability to draw investments and necessary financial aid. Such support will only be received when a country has a stable Government in place, he said. Marikkar noted that the 20th amendment to the constitution was adopted in parliament without the need for a referendum, and that the Government should therefore move to adopt the 21st Amendment to the constitution in a similar manner.