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Sunday May 26th, 2024

Mangala to revise Sri Lanka’s ‘feel-the-pain’ illiberal carbon tax

CARBON TAX: Yellow vest protests were triggered when interventionists tried to slam a new carbon tax on motorists in France when more than half the retail fuel prices were already tax.

ECONOMYNEXT – Sri Lanka is planning to revise the basis of a ‘feel-the-pain’ illiberal tax proposed on European lines which critics say violates a time honoured liberal governance principle established by South Asian civilizations for millennia.

Sri Lanka proposed a ‘carbon tax’ which hit older cars, owned by pensioners which were hardly used, proposing lower taxes for cars owned by affluent users including hybrids which were on the run everyday.

The tax was originally based on a complex criteria including the age of the vehicle, engine capacity, which had no direct connection to the actual use or burning of fuel.

Finance Minister Mangala Samaraweera had decided to revise the basis in the wake of public appeals, experts and difficulties in implementing the tax at the level of division secretaries, the state information office said.

The cabinet had given the approval for the Finance Minister to change the basis at the committee stage of the debate, so that it is based more on fuel use.

Climate advocates, the green energy lobby and interventionists in Europe have proposed ‘feel-the-pain’ taxes which are designed to hurt tax payers and make feel enough pain to change their behavior.

Critics had pointed out that such mis-use of the tax system is against the governance principle of South Asia, which had been adopted world wide as well, which broadly says taxes should be collected as a bee collects honey without hurting the flower.

In France irate motorists took the streets after a feel the pain carbon tax was proposed on vehicle users who are already paying around 60 percent of the retail price of petrol and diesel as taxes.

In Sri Lanka petrol which has a higher hydrogen atom content is taxed at a higher rate and is also retailed a higher rate than diesel, which has more carbon, causes more pollution generally with nitrogen oxides and has also been named a probably (group 2A) carcinogen by the World Health Organization. (Colombo/Oct11/2019)

Comments (2)

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  1. Tax Payer says:

    The aim of any Sri Lankan government in place is to do anything and everything possible to increase tax revenue. This goes for the emissions testing and carbon tax. Next will be a fart tax on the citizens and say its to cut down on pollution.

  2. sacre blieu says:

    All vehicles with internal with internal combustion engines are charged with the carbon tax when they renew the revenue licences. Ironically, foreign junk are been imported under the guise of re-cycling or reconditioning where only a minor amount is possible the rest remains here. All such containers should be sent back forthwith, and no country can object going by the various related conventions, etc.

    Any importer of any goods has the right to reject and return the goods and even recover losses. Here the deceit and deception is glaring and what are they waiting for when the evidence is right before their eyes.

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Your email address will not be published. Required fields are marked *

  1. Tax Payer says:

    The aim of any Sri Lankan government in place is to do anything and everything possible to increase tax revenue. This goes for the emissions testing and carbon tax. Next will be a fart tax on the citizens and say its to cut down on pollution.

  2. sacre blieu says:

    All vehicles with internal with internal combustion engines are charged with the carbon tax when they renew the revenue licences. Ironically, foreign junk are been imported under the guise of re-cycling or reconditioning where only a minor amount is possible the rest remains here. All such containers should be sent back forthwith, and no country can object going by the various related conventions, etc.

    Any importer of any goods has the right to reject and return the goods and even recover losses. Here the deceit and deception is glaring and what are they waiting for when the evidence is right before their eyes.

Sri Lanka power outages from falling trees worsened by unfilled vacancies: CEB union

HEAVY WINDS: Heavy rains and gusting winds have brought down trees on many location in Sri Lanka.

ECONOMYNEXT – Sri Lanka’s power grid has been hit by 300,000 outages as heavy winds brought down trees, restoring supply has been delayed by unfilled vacancies of breakdown staff, a union statement said.

Despite electricity being declared an essential service, vacancies have not been filled, the CEB Engineers Union said.

“In this already challenging situation, the Acting General Manager of CEB issued a circular on May 21, 2024, abolishing several essential service positions, including the Maintenance Electrical Engineer in the Area Engineer Offices, Construction Units, and Distribution Maintenance Units,” the Union said.

“This decision, made without any scientific basis, significantly reduces our capacity to provide adequate services to the public during this emergency.

“On behalf of all the staff of CEB, we express our deep regret for the inconvenience caused to our valued customers.”

High winds had rains have brought down trees across power lines and transformers, the statement said.

In the past few day over 300,000 power outages have been reported nationwide, with some areas experiencing over 30,000 outages within an hour.

“Our limited technical staff at the Ceylon Electricity Board (CEB) are making extraordinary efforts to restore power as quickly as possible,” the union said.

“We deeply regret that due to the high volume of calls, there are times when we are unable to respond to all customer inquiries.

“We kindly ask consumers to support our restoration teams and to report any fallen live electrical wires or devices to the Electricity Board immediately without attempting to handle them.

The union said there were not enough workers to restore power quickly when such a large volume of breakdowns happens.

“We want to clarify that the additional groups mentioned by the minister have not yet been received by the CEB,” the union said.

“Despite the government’s designation of electricity as an essential service, neither the government, the minister in charge, nor the CEB board of directors have taken adequate steps to fill the relevant vacancies or retain current employees.

“We believe they should be held directly responsible for the delays in addressing the power outages due to the shortage of staff.”

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Melco’s Nuwa hotel to open in Sri Lanka in mid-2025

ECONOMYNEXT – A Nuwa branded hotel run by Melco Resorts and Entertainment linked to their gaming operation in Colombo will open in mid 2025, its Sri Lanka partner John Keells Holdings said.

The group’s integrated resort is being re-branded as a ‘City of Dreams’, a brand of Melco.

The resort will have a 687-room Cinnamon Life hotel and the Nuwa hotel described as “ultra-high end”.

“The 113-key exclusive hotel, situated on the top five floors of the integrated resort, will be managed by Melco under its ultra high-end luxury-standard hotel brand ‘Nuwa’, which has presence in Macau and the Philippines,” JKH told shareholders in the annual report.

“Melco’s ultra high-end luxury-standard hotel and casino, together with its global brand and footprint, will strongly complement the MICE, entertainment, shopping, dining and leisure offerings in the ‘City of Dreams Sri Lanka’ integrated resort, establishing it as a one-of-a-kind destination in South Asia and the region.”

Melco is investing 125 million dollars in fitting out its casino.

“The collaboration with Melco, including access to the technical, marketing, branding and loyalty programmes, expertise and governance structures, will be a boost for not only the integrated resort of the Group but a strong show of confidence in the tourism potential of the country,” JKH said.

The Cinnamon Life hotel has already started marketing.

Related Sri Lanka’s Cinnamon Life begins marketing, accepts bookings

(Colombo/May25/2024)

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Sri Lanka to find investors by ‘competitive system’ after revoking plantations privatizations

ECONOMYNEXT – Sri Lanka will revoke the privatization of plantation companies that do not pay government dictated wages, by cancelling land leases and find new investors under a ‘competitive system’, State Minister for Finance Ranjith Siyambalapitiya has said.

Sri Lanka privatized the ownership of 22 plantations companies in the 1990s through long term leases after initially giving only management to private firms.

Management companies that made profits (mostly those with more rubber) were given the firms under a valuation and those that made losses (mostly ones with more tea) were sold on the stock market.

The privatized firms then made annual lease payments and paid taxes when profits were made.

In 2024 the government decreed a wage hike announced a mandated wage after President Ranil Wickremesinghe made the announcement in the presence of several politicians representing plantations workers.

The land leases of privatized plantations, which do not pay the mandated wages would be cancelled, Minister Siyambalapitiya was quoted as saying at a ceremony in Deraniyagala.

The re-expropriated plantations would be given to new investors through “special transparency”

The new ‘privatization’ will be done in a ‘competitive process’ taking into account export orientation, worker welfare, infrastructure, new technology, Minister Siyambalapitiya said.

It is not clear whether paying government-dictated wages was a clause in the privatization agreement.

Then President J R Jayewardene put constitutional guarantee against expropriation as the original nationalization of foreign and domestic owned companies were blamed for Sri Lanka becoming a backward nation after getting independence with indicators ‘only behind Japan’ according to many commentators.

However, in 2011 a series of companies were expropriation without recourse to judicial review, again delivering a blow to the country’s investment framework.

Ironically plantations that were privatized in the 1990s were in the original wave of nationalizations.

Minister Bandula Gunawardana said the cabinet approval had been given to set up a committee to examine wage and cancel the leases of plantations that were unable to pay the dictated wages.

Related

Sri Lanka state interference in plantation wages escalates into land grab threat

From the time the firms were privatized unions and the companies had bargained through collective agreements, striking in some cases as macro-economists printed money and triggered high inflation.

Under President Gotabaya, mandating wages through gazettes began in January 2020, and the wage bargaining process was put aside.

Sri Lanka’s macro-economists advising President Rajapaksa the printed money and triggered a collapse of the rupee from 184 to 370 to the US dollar from 2020 to 2020 in the course of targeting ‘potential output’ which was taught by the International Monetary Fund.

In 2024, the current central bank governor had allowed the exchange rate to appreciate to 300 to the US dollar, amid deflationary policy, recouping some of the lost wages of plantations workers.

The plantations have not given an official increase to account for what macro-economists did to the unit of account of their wages. With salaries under ‘wages boards’ from the 2020 through gazettes, neither employees not workers have engaged in the traditional wage negotiations.

The threat to re-exproriate plantations is coming as the government is trying to privatize several state enterprises, including SriLankan Airlines.

It is not clear now the impending reversal of plantations privatization will affect the prices of bids by investors for upcoming privatizations.

The firms were privatized to stop monthly transfers from the Treasury to pay salaries under state ownership. (Colombo/May25/2024)

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