Sri Lanka political hypocrisy on taxation condemned

lkdood

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Apr 7, 2008
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The lavish perks enjoyed by Sri Lankan politicians who get tax-free benefits, while preaching 'patriotism' to the common man, have been slammed by the island's influential Sunday weeklies in one voice, as the government dragged its feet over a court order to cut petrol taxes.

Sri Lanka's Supreme Court ordered the government to cut taxes and reduce the price of petrol from 122 to 100 rupees a litre at a time when the international wholesale price of petrol is only about 25 rupees a litre.

Court said taxes of 180 percent were too high and profits were also too high. By Sunday only private-listed Lanka IOC had cut prices, while state-run Ceylon Petroleum Corporation awaited an order from the cabinet of ministers.

State Exploitation

The government had traditionally over-taxed petrol claiming it was used by the 'rich' while selling diesel at a lower price.

The Sunday Times newspaper in a hard-hitting editorial titled 'Exploitation by State' recalled that the country's constitution held that "the exploitation of man by man or by the State" should be eliminated.

"This week, the Supreme Court gave tangible meaning to those words with an order to the State to stop exploiting the public under whatever guise or ruse," The Sunday Times said.

"To say that petrol is used only by the rich, and therefore to justify the exorbitant taxes and levies imposed is both unfair and untrue.

"Those who use petrol include trishaws - both driver and passenger; motorcycles and mo-peds; and re-conditioned cars which are not the vehicles of the wealthy."

While petrol is used mostly by the poorer people, diesel is used by business, and politician who import luxury diesel guzzling SUVs tax-free, as well as the super-rich who import diesel-engined vehicles by paying very high import duties.
But diesel is sold at 80 rupees a litre, though the product costs about 30 percent more than petrol to import.

Patriotism without Sacrifice

In dragging their feet over cutting petrol taxes, government politicians had tried to say that some elements were trying to weaken state finances and hurt an internal war, a familiar refrain to justify state excess.

"The way the government acted after the court ruled that petrol must be sold at Rs. 100 a liter was, to say the least, pathetic," The Sunday Island said in an editorial.

"Inevitably, the 'war cry' has also been heard loud and clear. How are we to prosecute the war against the LTTE terrorists if funds for the purpose are not available?"

"Can it simply keep repeating the 'war to be fought' mantra for all its sins?," asked The Sunday Times.

"Does it not have to make sacrifices itself? These are but some of the questions that will be thrown at the Government by the public."

Earlier this year tens of thousands of state-workers were given a chance to buy tax-slashed vehicles, sharply reducing state revenue. There were no mention about patriotism or the war at that time.

In the past few years unprecedented salary hikes of up to 20 percent a year had been given annually to state workers. Now more than 50 percent of all taxes go to state salaries and pensions.

But Sri Lanka's politicians themselves do not pay taxes on their salaries and perks.

In stark contrast to the motor-cycle owner who uses his own vehicle to get to work using over-taxed petrol, state workers get subsidized 'season tickets' to travel on loss-making state rail and bus services.

Since 2004, the government has also printed money insidiously stealing from all and sundry through 20 percent inflation, particularly the poor and old people whose savings have been secretly confiscated through negative real rates.

Sri Lanka has more than a 100 ministers who The Sunday Island said enjoy perks even leaders of developed countries do not.

"The people have got cynical about the way that these lovers of the country shower the country’s resources on themselves with perks that power wielders even in affluent developed countries do not enjoy."

Gluttony

"On the other hand, it is the members of the out-sized Cabinet and favourite bureaucrats that ride in limousines with escort vehicles for which the public also has to pay in addition to the fuel for their own vehicles," the Sunday Times added.

"The Government has been importing bullet-proof and other fuel-guzzling vehicles in recent months, the most recent being for a three day SAARC [South Asian Association for Regional Co-operation] summit."

The Sunday Times also referred to Mihin Air, a pet project of the Rajapaksa administration that has become a symbol of the government's profligacy.
The budget airline, which had already cost the people more than three billion in losses has been allocated a further 6 billion rupees in the most recent budget.
"Who is footing this bill? The already economically battered public is," the newspaper said.

The Sunday Island added : "Those who proliferate ministries faster than rats breed, creating over 100-strong jumbo cabinets to ensure their political survival, whiz off abroad at the drop of a hat, pay themselves (or their daughters) Rs. 100,000 rent allowances and engage in extravagances and profligacy they would (or could) never indulge in out of their own pockets can hardly talk about blocking tax revenues for the very good reason that they appropriate far too much of such revenue to give themselves a jolly good time.

"If they do, the taxpayers will roll on the ground laughing themselves silly."
The fiery Sunday Leader was even more scathing.

It referred to the country's prime minister "rushing about the country wailing that no one who loved Sri Lanka had a right to block taxes because the government needs money to develop the country and to protect it from terrorism."

"Touching," the newspaper's editorial said cynically. The Sunday Leader said the current administration had "dug their paws into the Treasury's largesse and helped themselves to gobfulls of loot."

"Thus it is that the President and his ministers trot the world's fleshpots, staying in super-luxury hotels with entourages of hundreds of relatives and attendant clowns and cronies, all at massive expense to us the people.

"It is how the government justifies maintaining more than 100 ministers, when India, with a population 50 times our own, gets by with just 30, and even the mighty United States has just 15."

LBO