Sri Lanka tax-spending docs, bureaucrats to strike for tax-free cars
ECONOMYNEXT – Sri Lanka’s doctors and top bureaucrats, most of whom have earned their degrees and basic education with taxes paid by other people have threatened to strike to get cars without paying the taxes that other people pay.
Even relatively poor people like fishmongers travel around in motorbikes on which high rates of taxes have been paid.
In a budget for 2016 Finance Minister Ravi Karunanayake proposed to end the practice of giving tax free cars to the tax-spending elected ruling class and state workers.
The elected ruling class has also protested against the move.
The elected ruling class imposes the taxes on the people and the bureaucrats collect the taxes.
Sri Lanka’s state sector unions are organized and vocal. The elected ruling class decides the taxes after debating among themselves.
The ordinary people who are taxed heavily are not organized and have so far not protested against the feudal style tax privileges of the elected ruling class and tax collectors.
The strike comes after a steep salary increment to state workers, for which the budget 2016 has imposed new taxes on the people. Finance Minister Karunanayake said 40 billion rupees in potential taxes would be lost from the tax free permits. It is not clear what additional taxes would be needed to cover the revenue loss.
Last year the rupee fell from 131 to 142 as money was printed to finance the deficit. Next year Sri Lanka is seeking a bailout from the International Monetary Fund.