Sri Lanka is a rich man’s paradise. There is NO capital gains tax, no inheritance taxes, very low property taxes if any, and best of all to those who choose to declare their income ( a small minority of those who are in this high income bracket ) low income tax rates to boot.
No wonder therefore that with high consumption taxes, on essential food, and VAT, it is the poor and middle class who singularly bear the burden of taxation in Sri Lanka.
In this context why can’t we encourage fare play, where in business there is transparency, and therefore competition, so that the most efficient method is used in investment decisions to benefit the economy, and not as is the case at present, where projects on which high commissions, and no tenders are undertaken are those permitted, outside all business norms, costing the economy dearly.
Just imagine if we had this transparency, where would our economy be? We would not have wasted the massive borrowings on unproductive investments, but have engaged in investments of benefit to the economy, and therefore could have increased the National Income to much higher levels at a more equitable level of distribution than at present.
In my earlier blog I alluded to the fact that those who were with the Govt. got to cherry pick, even they would in the end have benefitted more, in an economy where the spending power of the people would be much higher than now, where only a few have the wherewithal to engage in conspicuous consumption.
Lower taxes means that this is NOT a disincentive to investment, and outflow of money to other safe havens, and we can, not just be a Singapore, but a country enjoying a far higher quality of life to Singapore, where we do not have to engage in comparison, but in our own home grown development, where all the people enjoy greater benefits.
I would therefore see greater investment in public transport, access to better education, healthcare and a more efficient public service, all of which will benefit the majority of the citizens, not just a select few. The govt. would not get involved in wasteful expenditure on running airlines, refining oil and with Mahaweli still supplying 50% of our electricity needs, as of yesterday, shows in real light, what investments have provided a return and which have NOT.