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Last Updated : 2024-05-06 18:48:00
14 November 2023 12:00 am - 21 - {{hitsCtrl.values.hits}}
People are feeling the heat when purchasing essentials after the government imposed multiple taxes on consumers to meet the conditions laid out by the International Monetary Fund (IMF)
“The IMF has specifically said that they aren’t happy about how we are preparing the Budget. This is why we need realistic values. We have agreed to the IMF to maintain a low budget deficit and in this backdrop it would be difficult to increase government revenue,”
- Prof. Aminda Methsila Perera, Head Department of Accountancy, University of Wayamba
“There are no savings at the end of the day; once I pay the rent for the shop, settle utility bills and buy essential items to the house. A plastic strainer that was previously sold at Rs. 20 is now sold at Rs. 100. An item that was priced at Rs. 100 a few years ago is now priced at Rs. 1000 given the circumstances”
- Mohideen Ifthikar, Kitchenware Vendor from Maligawatta
“The government should be creating opportunities for income generation. Who will be willing to invest in a situation like this”
- Dr. Indrajith Aponsu, Senior Lecturer in economics, University of Colombo
“But what can I do with Rs. 50,000 when I have to pay for my children’s school and tuition fees, settle electricity bills, purchase medicines for my mother and spend the rest of the money on essential goods,
-Renuka Sandamali Resident of Maligawatta
Mohideen Ifthikar from Maligawatta makes a living as a kitchenware vendor. His daily income ranges between Rs. 1500-2000. Having left his previous job as a site supervisor, Ifthikar worries about not being able to save enough money for his future.
This is a common story shared by a majority of Sri Lankans who are facing hardships to survive the prevailing economic crisis. The government imposed multiple taxes on people to meet the conditions laid out by the International Monetary Fund (IMF). Many factions claim that the ‘Social Protection and Welfare’ Budget has been designed to please the IMF and that the government should be presenting more realistic figures and estimates.
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| The majority of people have one request and that is to bring down the taxes and reduce the cost of living |
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| Most daily wage earners don’t have any money to save once they meet all their expenses
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A future sans savings
For Ifthikar, earning Rs. 2000 a day doesn’t suffice as his expenses exceed his income. “There are no savings at the end of the day; once I pay the rent for the shop, settle utility bills and buy essential items to the house. A plastic strainer that was previously sold at Rs. 20 is now sold at Rs. 100. An item that was priced at Rs. 100 a few years ago is now priced at Rs. 1000 given the circumstances,” he said in an interview with the Daily Mirror.
He therefore questioned how he could possibly save any money when expenses are skyrocketing by the day. “This is a beautiful country, but people are divided. They don’t want to help one another. It’s the politicians who have done the damage. Hence it’s the people who will suffer,” said Ifthikar.
People have therefore compromised on bearing additional expenses while many apply for loans to survive the day. Renuka Sandamali, another resident of Maligawatta shares a similar story. She is a tailor by profession and her monthly income is around Rs. 50,000. “But what can I do with Rs. 50,000 when I have to pay for my children’s school and tuition fees, settle electricity bills, purchase medicines for my mother and spend the rest of the money on essential goods,” she questioned. “I don’t have any money to save once I meet all my expenses. This is not what we expected a few years ago. Previous governments had never thought about the people. It will be the same this time around as well. We don’t want any relief schemes like Samurdhi. Our only request is to bring down the taxes and reduce the cost of living. The government is very much capable of doing it, but they have to fill their pockets first. So our priorities don’t count,” she complained.
Politicisation of welfare benefits
As per the Budget 2024, the Aswesuma social protection allocation has been increased by Rs. 183 billion while the allocation for senior citizens has been increased to Rs. 3000. But economic experts believe that providing welfare schemes to the people would only help sustain the existing political system. “We need growth and development both, but these welfare benefits don’t contribute to the growth momentum,” said Dr. Indrajith Aponsu, Senior Lecturer in economics at the University of Colombo. “The government should be creating opportunities for income generation. Who will be willing to invest in a situation like this? The government needs to facilitate grounds for entrepreneurship, but bureaucracy has been such a barrier and it has intensified,” said Aponsu.
Need for realistic values
Last month, public servants took to the streets demanding an increment of Rs. 20,000 to which President Ranil Wickremesinghe responded in the affirmative. During yesterday’s (November 13) Budget President Wickremesinghe promised that the cost-of-living allowance for public servants will be increased to Rs. 17,800 from Rs. 7800 with effect from January 1, 2024 while the payment will commence from April 1, 2024.
“Increasing government workers’ salaries will add another Rs. 240 billion to the budget expenditure,” said Prof. Aminda Methsila Perera, Head – Department of Accountancy, University of Wayamba. “The government has to increase the social welfare network such as Samurdhi, but this time they have to go for more realistic values. The Budget is a policy document. Those days we used to listen to the Budget and analyse the developmental activities. But today it’s just numbers,” said Prof. Perera
Prof. Perera said that the government revenue is Rs. 4150 billion, but that it would be a challenge to collect this amount. “The IMF has specifically said that they aren’t happy about how we are preparing the Budget. This is why we need realistic values. We have agreed to the IMF to maintain a low budget deficit and in this backdrop it would be difficult to increase government revenue. It’s an issue to go for new taxes because already most businesses have closed down,” said Prof. Perera.
While Sri Lanka has been trying to please the IMF it has also incurred many losses. “Over the past 10 months our exports have dropped by US$ 900 million. We did all these changes to obtain US$ 330 million as the first instalment from IMF. We are still awaiting the second instalment,” he said while adding that there could be certain positive aspects such as providing subsidiaries for SMEs; all which would happen amidst tight controls on the economy.
Hence, for the Ifthikars and Renukas, survival hangs in the balance as they continue to live with hope for a better future - a future without taxes and a future where they could save at least a little bit of their earnings.
Ravana Tuesday, 14 November 2023 08:42 PM
Dear Madams and Sirs of politics Think countrymen before henchmen Think patriotism before racism Think serving the people before serving your family and friends We'll be happy to pay taxes and even more if we are served what we need instead of what you "think" is good for us. Start small, what follows will be perfect. We, the people, know that one must water a plant in order to harvest fruits. We find that people, who will get acquitted, are stealing these fruits. Catch my point? So why water it? Just try that for a single term, what better time than now, RW's reign is perfect.
wickrama wijayasiri Tuesday, 14 November 2023 08:49 PM
An interesting dilemma. It has come down to the value of the common man's labour. Many people in SL work as hard as the citizen of the prosperous countries. However our productivity is low in value compared to those countries. Communism is not the answer. A bit of socialism, yes. The handful of Capitalists in SL are reaping from the efforts of the have nots. Heavy and fair taxation is part of the answer. However, this handful or their proxies are governing the country. People elect them for the job as they have no choice. Our problems are mainly due to corruption of the 'governers' and inefficient idiotic management. Then comes the unrealistic expectations of the common citizenry.
Percy Wijenayake Wednesday, 15 November 2023 04:24 PM
The main problem with Sinhalese is they are not down to earth. Keeping up with the Jones and not to be identified as 'have nots' avoiding public health systems, transport, subsidised food, fashion conscious and low income support, and not living within their means. Have no sympathy for them.
Percy Wijenayake Wednesday, 15 November 2023 04:33 PM
Increased allowances is a good move. The IMF is not wrong. Sri Lankans got to adjust for prevailing conditions. We are used to this in the West while Sri Lanka is enjoying a good life.
Alpha Thursday, 16 November 2023 01:29 PM
Money in anybody's hands will be spent, invested or saved. If spent, it will add to the tax revenue and also help economic growth. If invested it will grow the economy. If saved in Banks, cash resources will increase and interest rates will drop helping economic growth. We should therefore scrap income tax and introduce indirect taxes targeting the wealthy such as fuel tax, entertainment taxes etc. plus wealth taxes to be collected from property and vehicles through Local Councils and the RMV, CEB etc by using Property Taxes and Revenue Licence and monthly bills as the means for collection. Revenue figures will become easily predictable and achievable. The means of collection will be fair and equitable. People who cannot spend due to low disposable incomes will not be liable. Scrapping Income Tax will reduce prices and COL significantly as the multiplicity factoris not there. It is time to think out of the box to be fair and equitable to everybody and reduce corruption significantly..
'STARVING' TAX PAYER SINCE 1975. Thursday, 16 November 2023 09:53 PM
INCREASE INDIVIDUAL INCOME TAX THRESHOLD TO RS.500,000 PER MONTH - MEANING RS. 6 MILLION PER YEAR - GET RID OF TAX FILES OF THE POOR. AFTER THE THRESHOLD TAX SLAB TO BE MINIMUM 20%.
Jay Tuesday, 21 November 2023 02:50 AM
Not paying taxes is the "gode" way of thinking. It was encouraged by the Rajapaksa family and the people got used to it. Everyone pays taxes in any country in the world.
Hora Gota Tuesday, 21 November 2023 11:21 AM
I honestly clicked this link because the person in the thumbnail looked like Hora Gota.
M Fernando Tuesday, 21 November 2023 10:29 PM
As long as the Colombo 7 types and Ministers and other leeches of the Public Purse have their money to purchase their Daily Essentials, Diesel, Petrol and Electricity, who cares about the less-fortunate ? Let them eat grass, I say ! The protests from last year flamed out not because the problems were solved but because the President targeted the people who could bring most pressure on his Administration and made sure their needs were satisfied.
Gajaba Walimunidewa Wednesday, 22 November 2023 06:33 AM
Rubbish! Sri Lankan do not mind paying tax if their tax money benifit the country without going down the drains and without going to please politicians. Tax is the main income of any government and the government should put that money into good use. Also, taxation formulae must be fair for the citizens.
Ganesh Thursday, 23 November 2023 12:57 AM
Let’s do away with taxes and in the same way let’s do away with free education and healthcare. Let’s see how people react. Let’s be practical we have been living on other peoples money since time in memorial. Stop giving handouts. People need to get used to the grind. Stop the corruption. Bring in price controls.
vis8 Monday, 27 November 2023 08:08 AM
"No taxes"????, Then, let's try communism... :)
Sambo Friday, 01 December 2023 07:52 PM
The people want life with fare taxes. Not exorbitant as enforced now.
Athula Alugamagodage Monday, 04 December 2023 08:15 PM
As a government servant, we need increased salaries, more holidays, no income tax, free medical, good pension and free education. That is what we want as government servants. Also the lunch hour should be extended for two hours. One hour to eat and another hour for a nap.
Poor tax payer Wednesday, 06 December 2023 06:15 AM
Those who don’t want to pay fair taxes are worse than the beggars, in fact are beggars. They want free medical, free education, low energy prices, low food prices, more government handouts and the list goes on. What a load of wankers these people are, don’t they realise money has to come from taxes to spend for those freebies? Actually it’s the politicians including JVP who don’t want to implement taxes just for vote caching. Also politicians rob money. JVP women recently protested trimming budget allocation for women affairs. What’s Jeppo trying to do, vote catching, a pre indication of what’s to come if JVP comes into power. US is encouraging for their own agenda. We are terrible nation, only take no giving! A bunch of beggars including doctors, lawyers and any other professionals not wanting to pay taxes. We will be “Kabalen Lipata”
Kulasiri Walaharapugama Friday, 08 December 2023 03:09 AM
Wow this is a good move. No more taxes and government can ask for aid from other countries. What genius!
vis8 Tuesday, 12 December 2023 07:29 AM
Life without taxes??? - That's the communist way. Taxes are often called "communism in the West"
Alpha Wednesday, 13 December 2023 04:48 PM
My contention is that taxes should primarily be charged from the wealthy - tax on properties, vehicles, ostentatious consumption etc. mainly through indirect taxes. Citizens and Companies should be encouraged to work hard and increase their earnings as much as possible. Such a move will help the country to grow and corruption in tax collection will be eliminated.
Sambo Friday, 15 December 2023 08:16 PM
One cannot expect a life without taxes, but the taxation has to be fair by the people. There should be a return for taxes paid by the public. But in Sri Lanka the taxes are misused and stolen by the politicians.
S.sangaralingham Wednesday, 20 December 2023 10:51 AM
Great o taxes o salariesnonealth care no education o public roads what else we have one don’t know. Allthe comforts facilities we have someone paying every day every minute every second by hard work labour education cooperation trust good faithtogovernment .govetnment dhahare it with public with all basic needs one needs.ifneed more work earneducate yourself develops,ills be enterprenuer pay taxes help the poor.elect your member to parliament wisely vote carefully ot hate ongerscorrhuption freelandalllive in respect cooperation oforeingnintrvention
Rohini Wijetilleke Sunday, 24 December 2023 12:30 AM
In the budget are the "PERKS" of current active politicians and retired politicians increased,decreased,or the same? Most perks should be abolished,and retired ones "PERKS" eliminated. Why should the ordinary struggling workers support the people who put them in misery?
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