Sri Lanka may give lump sum for car tax privilege; docs to strike

ECONOMYNEXT – Sri Lanka’s new administration may give a lump sum to state workers in lieu of a tax slashed car, according to a proposal considered at a party members meeting over the weekend, while doctors were planning a strike, reports said.

Sri Lanka’s legislators and state workers have given themselves tax free and tax slashed cars for years, while ordinary people in the private sector and self-employed were taxed at high levels when they even bought a motor cycle.

"Cash transfer in lieu of public sector vehicle permit," Deputy Finance Minister Harsha de Silva said in a twitter.com message.

"Now we have converted most of the subsidies; fertilizer, school uniforms and now vehicle permits, to this more efficient mechanism."

Cash transfers will make the real cost of the tax privileges given to state workers and legislators by the people, more transparent.

State workers were selling the ‘car permits’ in the secondary market to arbitrage the difference and ordinary citizens were buying them up to reduce their tax burden.

The government information office quoting Finance Ministry data said 147 billion rupees of revenue has been lost since 2012 to August 2015 from ‘car permits’.

Media reports said doctors in state hospitals were planning to strike over the plant to treat state workers the same way as ordinary folk.

Sri Lanka’s new administration in a budget in January gave a steep salary hike for state workers and is now struggling to tax other people to pay the salaries. The rupee has fallen from 131 to 143 the US dollars as the Central Bank printed money to finance the deficit.

The January budget also stepped up rhetoric on deceptive subsidies and what is called ‘ala loonu deshapalanaya’ (politics of potatoes and onions) drowning out an outcry from the civil society outcry for freedom and just rule of law or ‘Yahapalanaya’.
 

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