Opinion

EDITORIAL - Robin Hood style budget

02 Feb 2015 - {{hitsCtrl.values.hits}}

t is no secret that the revised budget presented by Finance Minister Ravi Karunanayake on January 29 to Parliament delivered heavy blows to certain businesses. It contained several one-off taxes and a controversial retrospective tax on companies who have posted over Rs.2 billion profits for the financial year 2013/14.
Though the new government may not publicly admit it, they have targeted certain businesses in the revised budget. For example, they have clearly targeted the existing casinos and the new ones that were planned. Rs.1 billion one-off tax was proposed on the five casinos already operating and they were asked to pay the tax before this April. The three new resort complexes of James Packer, John Keells and Dhammika Perera, which included gaming facilities were given the nod to go ahead sans casinos.

The government also has targeted a leading telecommunication company in the country by imposing a one-off tax of Rs.1 billion over its satellite TV operations. The latest issue involving this company was the alleged blocking of a TV programme aired by a private TV station, which was participated in by the then common presidential candidate Maithripala Sirisena.
Another example is the Rs.1 billion one-off tax imposed on a sports channel. This sports channel is said to have intimate links with the previous regime and forcibly, using state power, took away the telecasting rights of cricket matches from Rupavahini, the country’s national television, depriving Rupavahini of its major revenue stream.

This could be the first time a national budget was used to such an extent to deliver financial blows on identified businesses, which under normal circumstances is completely unwarranted. There were a number of businesses that attempted to curry favour with the previous regime, which carried out unacceptable business practices during the last five years. In return, the previous regime allowed some of these businesses to plunder public wealth. Therefore, to reverse this ugly turn of events, the present administration seemed to have resorted to drastic measures through its revised budget, which are not easy to concede, but appear justified.
Despite their controversial nature, these measures would set a positive precedent. They very well give the message to private businesses and their top management not to engage in politicking.

At a recent post-budget seminar, Ceylon Chamber of Commerce Chairman Suresh Shah stressed that not everyone in the private sector has ill-gotten gains, which is of course undisputable. But by saying this, he indirectly admits that there are some in the private sector who have ill-gotten gains.
The right-leaning United National Party is generally perceived as the business-friendly political party in the country. But the circumstances have led such a political party to opt for a Robin Hoody-style budget to rectify the wrongdoings under the previous regime.
“We were a pro-businessmen party, but at the end of the day where were the businessmen? They were with the dictatorial powers,” Finance Minister Ravi Karunanayake told the same forum.

We believe that the business community should take these developments in the right spirit, as the new administration is trying to bring in inclusive growth through a responsible means of re-distribution of wealth. This would lubricate the wheels of the economic cycle, as instead of the previous 2 percent, 98 percent of the population would start consuming more and more goods and services, ultimately benefiting the businesses.

Opinion

EDITORIAL - Robin Hood style budget

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