Even when assessed against Sri Lanka’s despicable robber baron history the Government’s recent attempt to tax the profits of the Employees’ Provident Fund (EPF) and the Employees’ Trust Fund (ETF)belongs in a contemptible category quite of its own.


Kishali Pinto Jayawardene

Sri Lanka’s contemporary politicians have, without exception, developed the robbing of the public coffers into a fine art.

Gross monetary debauchery

It makes little difference if they have hailed from the plush environs of Colombo with so-called historic legacies to boast of or from the wilds of Polonnaruwa and the deep South. With public funds fattening political wallets, Central Bank Governors have been dragged before court on various ‘scams’ with one fleeing overseas as a fugitive. Meanwhile disclosures in international corruption investigations such as the Pandora Papers and Panama Papers implicating ‘politically connected persons’ remain in limbo. All this while the country has been driven deeper and deeper into enormous debt.

In tandem with the looting of public funds, the rot of politicisation has eaten away at the innards of once respected national institutions such as the Central Bank and the Monetary Board tasked with Sri Lanka’s monetary policy. The public perception of these institutions are at an all time low. Justly or unjustly, its members are seen as ingloriously dancing to the tune of many and varied political pied pipers. The judiciary has also not significantly intervened to impose punishments on political robbers, let it be said bluntly.

The end result has been that we the people, are collectively punished for the sins of that decades-long wild ride into gross monetary debauchery. Sri Lanka’s post independence financial record may be summed up in those few tersely bitter paragraphs. It is no wonder therefore that the nation has been crucified by the world as teetering on the brink of sovereign bankruptcy even though the Central Bank Governor goes choleric with rage if that eventuality is mentioned, even in passing by pesky journalists at media briefings.

The wolf at Sri Lanka’s door

But despite these unconvincingly shrill denunciations, stark realities of the freezing of foreign currency accounts of citizens, scarce goods and the wolves of international creditors at the door demanding their pounds of financial flesh, tell a different story. Certainly the blame cannot all be laid at the feet of the global pandemic as even a child will point out. If that is so, then all our neighbours in South Asia should also be in the same plight as us. Instead, we trot around with a begging bowl to them, chanting ‘more, more’ much like a desperate modern-day Oliver Twist.

In short, it is categorically Sri Lanka’s political leadership of all shades and sizes, past and present, that is responsible. No one can wash their hands of the dismal fate that has befallen this nation. Opposition politicians who bring down the wrath of the heavens on the ruling regime for what they term as daylight robbery of public money must be reminded of their record when the Central Bank was gripped in the ‘yahapalanaya’ bond scam scandal. Did they speak out against that infamy which occurred not once but twice?Or did they stammer and stutter, obfuscating at times or flat out denying when it suited them?

Now, as much as Rajapaksa loyalists earlier chanted in opposition, that ‘no one robbed as no one had been successfully convicted by courts,’ that same chant is repeated by Samagi Jana Balavegaya (SJB) frontliners. They seem to think that just because the fugitive Central Bank Governor under their watch had not been brought back to Sri Lanka and punished, there had been no bond scam. The public however (unequivocally) knows that this is not the case.

Robbery of public funds is a collusive exercise

Opposition politicians should therefore mind their careless tongues if they know what is better for them. Put simply, the robbery of public funds is a case of collusion between political parties, none of which will bring the other to book.

That said and even assessed against Sri Lanka’s despicable robber baron history, the Government’s recent attempt to tax the profits of the Employees’ Provident Fund (EPF) and the Employees’ Trust Fund (ETF)belongs in a contemptible category quite of its own.

The two workers’ funds are caught up in a Surcharge Tax Bill that has proposed to (retrospectively) impose a 25% tax on companies that had made profits of over Rs. 2 billion during the year of assessment commencing from April 2020. Here too, government and opposition politicians trade insults over the floor in Parliament, blaming each other.

Government politicians argue that, a ‘yahapalanaya’ inland revenue law (2017) had interpreted the term “company” to include ‘a friendly society, building society, pension fund, provident fund, retirement fund, superannuation fund, or similar fund or society.’

Accordingly, the Inland Revenue Department had issued a ruling that income earned through investment of EPF/ETF funds should be taxed, a position that had been contested by the current Labour Ministry. The Ministry has, to give it due credit, opposed the current proposal as well. Vociferous opposition has also ensued by the private sector on what they term as retrospective double taxation that the Bill seeks to impose.

As political allegations are traded, the public has got tired of this circus. Regardless of what may or may not have happened previously, the blame game must stop.

Turning points of public anger against Governments

If the Government wishes to stop trade union strikes which will cripple the economy recovering after two years of covid paralysis, it must desist from waving red flags to the salivating trade union bull. Is it inviting new “Roshen Chanaka’s’ to martyr themselves on the altar of police excesses against demonstrators?

As must be recalled, Roshen Chanaka died when shot by law enforcement officers in 2011 after joining a protest at the Katunayake Free Trade Zone against a pension scheme proposed by the Mahinda Rajapaksa Presidency.

That scheme, no less imaginatively than the instant proposal, had contemplated contributions of 2% from the salaries of private sector workers to a pension fund which would not have resulted in any gains to the enraged workers. Rallying in Katunayake against the scheme, more than two hundred protestors were quelled with water cannon, tear gas and batons and live rounds while female workers were brutally assaulted, with huge numbers seeking treatment in hospitals. At the time, enormous public pressure compelled the resignation of top police officers but later, after the uproar died down, some were reinstated.

However the 2011 FTZ protests became a turning point of public anger against that regime. It was an excellent warning to politicians seeking to profit off workers’ hard earned money. That caution increases a hundred fold currently as a resentful covid-19 battered public take the brunt of bad economic management and hasty policy changes, ranging from an ill-thought out ban on chemical fertiliser to private sector chieftains making fat returns from garlic scams to sugar scams with political patronage.

Is the Government courting trade union martyrdom?

Fine speeches at political rallies by political leaders seeking to position themselves for upcoming elections do not soften crushing economic deprivations that citizens face as they try to survive each day. Are we asking for more to join the ranks of trade union martyrdom in protests of the robbery of EPF/EFT funds, certainly a cry that will strike directly at the public’s heart?

That is the question that the Government must ask itself.

Courtesy:Sunday Times