Sri Lanka should slam carbon, import, land taxes on people to finance ruler spending: Stiglitz
ECONOMYNEXT – Nobelist and ‘progressive’ economist Josepsh Stiglitz proposed that Sri Lanka slam land, carbon and import taxes on ‘luxuries’ to finance rising state spending.
He said since most luxury goods were imported it would be easy to tax them.
If people try to underpay the land tax, he said there should be a provision in the law for the state to expropriate it at the declared value to punish them.
He said a carbon tax could be used to punish people who were polluting.
Stiglitz was speaking at an economic forum with Sri Lanka’s Prime Minister Ranil Wickramsinghe in Colombo. Wickramasinghe said Finance Minister Ravi Karunanayake had just come in and was taking notes.
Sri Lanka’s state finances, already in trouble due to tax holidays and a bloated public service was hit by a 40 percent salary increase in 2015 after the new administration raised salaries of state workers to buy votes.
Robert Conrad a top tax economist said he would be in favour of land taxes if the government also paid such taxes. Historically he said land taxes were difficult to administer and had not yielded more than two percent of revenue.
Tax are better aimed at flows than stocks he said. It is better to tax increase in value than just property he said.
In Sri Lanka the state is the largest owner of land. The state has expropriated people and taken the land from the people on several occasions.