Debt trap – A way out!

May 19, 2017 at 5:36 pm

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The government quite rightly has told the people that the country’s economy has been adversely affected owing to the heavy debt problem created by the previous regime. Hence, it has to adopt certain measures, e.g., Vat Tax, enhanced fines for traffic offences, leasing or selling of prime land to foreign investors etc., as a means to address this issue. It is common knowledge that these policies are not well accepted by the general public. One of the reasons for this discontentment among the public is that they are doubtful as to whether the government will be able to ensure all monies collected by these not so popular measures are not squandered as in the past? And there is also the possibility of the next party to come in to power using the same excuse and put the blame on the government of today and continue to make the general public to endure more and more hardships. Hence allowing this vicious cycle to continue no matter who governs the country!

The next point is how much money is the government expecting to collect by way of introducing all these new forms of taxes, fines etc., as opposed to the amount of money the government is currently spending on maintaining various Provincial Councils and other Institutes coming under their purview? Today, if one is to hold a referendum as to whether the public wishes to continue with the Provincial Councils or do away with these ‘White Elephants’, the majority of people would opt for the latter. Then the government can utilize the tax payer’s monies that go to sustain such unproductive entities to improve health care, education and, in general, improve the living standards of the people of this country without burdening the public with all kinds of new taxes and fines and having to beg and borrow from others like IMF and the World Bank.

 

In order to overcome the debt crisis, the government should also set a better example by pruning down the various perks enjoyed by the parliamentarians, e.g., duty-free vehicles. This will not only pave the way to put the tax payer’s monies to better use, but also discourage unsuitable people from clamoring to enter parliament!

 

Some other measures the government may adopt to grapple with the debt crisis are:

 

1. Ensure all guilty of misappropriating public money are brought to justice and their wealth is confiscated and made use to improve the living standards of the people.

 

2. Effective measures are in place to eliminate or minimize corruption and waste in the state sector.

 

3. Ban all government and public sector-related tamashas, monies thus saved be used for the benefit of the masses.

 

4. Curtail foreign travel of parliamentarians.

 

5. Have stringent measures in place to ensure foreign exchange earned by all the sectors is brought into the country not allowed to go in to foreign bank accounts.

 

6. Have a ban on import of all kinds of vehicles for at least a period of two years.

 

7. Have a well-thought of and effective wealth tax scheme in place. Ensure that the government gets all due taxes from the wealthy and affluent such as successful lawyers, doctors, businessman and those giving private tuition to name some. It is well known fact giving private tuition a lucrative business today, and I believe they are not being taxed as they should be. With regards to those running businesses, instead of having a value-added tax, which they (businessmen) conveniently pass on to the consumer, have in place a tax on the profit made by them on a quarterly basis. Of course, one must ensure they are not allowed to cook the books and avoid paying their due taxes In short, encourage direct taxation (where appropriate) and discourage indirect taxing and pass on that benefit to the masses in general.

 

8. Strive to remedy the balance of payment woes

 

Finally, have a transparent policy to make the public aware of the amount of money the government collects by way of all forms of taxes annually, and provide a breakdown of how that money has been utilized for the benefit of the people of Sri Lanka. After all striving to improve the quality of life of all citizens should be the top most priority of any duly elected government.

 

 

 

The Wondering Wanderer

island.lk