Sri Lanka confectioners fear new ‘feel-the-pain’ tax: report

ECONOMYNEXT – Sri Lanka’s confectioners are fearing a new European-style tax on sweets, on top of a renewed tax on sweet drinks a media report said, amid a rise in illiberal economic policy making under the current administration.

Sri Lanka’s The Sunday Times newspaper said a new sugar tax may come in the 2019 budget, pushed by the Ministry of Health.

Sri Lanka Confectionary Manufacturers Association has feared new taxes, involving and industry which employed 50,000 people directly and 150,000 indirectly, the report said.

The Wickremesinghe is slapping feel-the-pain taxes as the economy has been hit by prolonged monetary instability with two balance of payments crisis hitting within four years.

The rupee has fallen from 153 to 182 to the US dollar from 2015 to 2018.

Sri Lanka slapped a European-style sugar tax on sweet drinks harming the poor and the rich indiscriminate in a bid to make consumer ‘feel’ the pain and stop ‘indulging’ in sweet drinks.

European indiscriminate ‘Feel-the-pain’ taxes violate a fundamental principle of taxation originally developed in South Asian governance principles of extracting taxes by causing the least pain, well explained in Ved Vyas and in Arthashastra by Chankya (Kautilya).

"The Ruler should act like a bee which collects honey without causing pain to the plant," says the Mahabharata.

French votes finally rebelled against a ‘feel-the-pain’ eco tax, aimed at fuel users and the so-called ‘yellow-vest’ protests have shaken the nation, showing the value of ancient principles of governance.

Sri Lanka’s Ranil Wickremesinghe led administration slapped a ‘sugar tax’ on sweet drinks, which was promised to be reduced during a so-called constitutional coup triggered by President Maithripala Sirisena over his appointment of Mahinda Rajapaska.





Sugar taxes hit both the obese rich and people and kids suffering from malnutrition or calorie deficiencies equally.

Sri Lankans however tends to have a so-called ‘sweet tooth’ according to some international beverage makers who tested products, here the origins of which are not clear but may be related to calorie deficiencies during periods of severe economic difficulties.

Interventionist taxes which are intended to cause pain, gained legitimacy after governments imposed high taxes on tobacco a product discovered in the Americas, which human being were by large were not equipped to handle and it caused harm when used even in small.

Even at that time there were warnings that rulers will eventually mis-use such taxes to achieve vicarious desires by slapping taxes on goods consumed by unarmed citizens which caused harm only by over-use and not by their use.

Analysts say liberty is fragile, and can be easily lost unless unarmed citizens are vigilant.

Changing lifestyles, which reduced physical work as well as bad eating habits, dating back to the time when calories were scarce (more rice and less vegetables and proteins) which were intended for people with different work habits, have generated obesity in developed countries and more affluent sections of the population even in developed nations. (Colombo/Jan12/2018)

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