Editorial

The new tax regime introduced by the Government has had regular taxpayers abuzz, not so much those who don’t pay their taxes. Much of the valid criticism comes from the fact that the Inland Revenue Department has only 292,305 active income tax files when the number should be in the millions for a population of over 22 million.

Those steering the nation’s financial crisis towards calmer waters and safer shores may be frustrated that citizens still do not realise the gravity of the situation and that the elimination of queues for cooking gas and the partial solution to the fuel shortage have given a false sense of normalcy. That is not necessarily the case as was witnessed in Parliament this week with the vote enabling the petroleum sector to be partially privatised ending its state monopoly.

That vote seems to indicate the public mood. People are tired of the failure of the state sector to deliver the goods while running at massive losses. The financial crisis has brought home the stark reality that this welfare state cannot afford itself. Leaving secondary education and public health untouched, there is a need to rethink policy aimed at public-private partnerships with strong regulators fundamental to a policy shift.

There are also calls for revenue collectors to move away from the traditional taxation schemes that merely ‘milk’ those who have tax files and instead, bring into the net a wider range of non-taxpayers; politicians who ‘treat’ their constituents with undeclared money for instance; a lifestyle tax; even undergraduates to pay for their degree education through student loans, scholarships and other bursaries for those who can’t afford it; all public servants; and to ask people to indicate their tax file number rather than their NIC number where the latter is asked for – all to inculcate among the citizenry their responsibility towards the State, while high-end tax-payers are recognised and rewarded.

If the corruption-ridden Tax Department has an honest and effective Information Unit that sends out the 1-V form seeking data on spending habits of tax dodgers and an honest Investigations Unit follows up on that data with a handful of senior officers to supervise it, the Government will be in a much better position to rake in untapped revenue by the billions. For this, there has to be a serious political will backed by the proposed anti-corruption law in full thrust.

On the other hand, the imposition of taxes must be progressive steps not subjected to ‘shock treatment’ overnight. It is the Government’s responsibility to ensure that IMF prescriptions to stabilise the economy are not insensitive to ordinary folk trapped in this unpleasant economic dilemma and that no one faces an ‘operation successful, patient dead’ scenario. No nation can prosper by taxing its people beyond their capacity to pay. And it is the Government’s job to see that the money collected from taxes is spent prudently.

 

The UN & Sri Lanka; and the oxymoron

The United Nations marks its 77th anniversary since its founding in the aftermath of World War II with the hope of “ending all wars” in a planet currently on the brink of World War III.

The protracted war in Ukraine where the poor Ukrainians are made to defend their land and act as proxy for the West from the big Russian bully has its effects felt throughout the world. The UN remains a silent spectator, powerless in the face of even a possible nuclear catastrophe.

Sri Lanka has in recent years been on the wrong side of the UN, as evident in its engagement with the world body’s Human Rights Council (HRC) in Geneva. With all other UN agencies, Sri Lanka has cordial relationships, but the oxymoron is palpably ironic with its Armed Forces used for peacekeeping in Africa’s hotspots while the same military is being crucified for their alleged ‘war crimes’ at home.

The abysmal failure to build consensus on a robust and credible domestic accountability system in the face of a dogged West-driven accountability campaign has allowed the issue to migrate abroad. In the absence of meaningful momentum towards such a domestic consensus, HRC Resolutions against Sri Lanka from 2009 onwards, document how external intrusion on accountability has been snowballing in an incrementally aggressive way, perhaps unprecedented in HRC annals.

This process peaked in Resolution 46/1 in 2021 and the one last month. The former Res. (op. para 6) virtually established an investigative prosecutor’s office in Geneva to build databases and prepare cases against alleged ‘war crimes’ in Sri Lanka. The latest, widened and deepened this mandate to include the economic crisis, corruption etc. – a euphemism for micro-managing governance in this country from abroad. This is a serious slap in the face for any self-respecting sovereign State, let alone a country that prides itself as one of the oldest democracies in Asia with nearly a century-old practice of universal adult franchise.

While support for Sri Lanka’s position declined from 11 votes in 2021 to just 7 votes in 2022, the number of ‘doubters’ (abstentions), from the developing world including India, increased too. A few developing countries have begun to vote supporting this West-inspired aggressive approach of the HRC so the Government can no longer take refuge in the polemic that it is a North/South issue.

The UNHRC’s accountability project will likely grow deeper and wider and remain for the long haul. This will be funded by dollars available through the UN’s Regular Budget and extra-budgetary sources. No amount of chest-pounding or eloquence in courtroom argumentation will win votes for Sri Lanka. The stark reality is that co-sponsors of resolutions in the West selectively use human rights and the UNHRC to advance their own policy ends. They have ways and means to muster enough votes to do that. They will, therefore, like the proverbial ‘dog with a bone’, not let go of this new HRC template easily.

There is not much one can do, except put one’s own house in order and present a credible domestic alternative. For this, much substance is available from sources such as the Lessons Learned Commission (LLRC) more than ten years ago. A lot of ‘home-truths’ can also tumble out of such an investigation. Why wait till the open wound festers further.