2022-04-12 10:45:21
How Sri Lanka got ruinedLankans voted for Rajapakshas knowing very well what they did in the past, including corruption, selling out national assets to China, dynastic politics and all.
They still voted for them because Rajapakshas promised things they could not refuse.
1. Their GST, called VAT Tax, on all products was reduced to 8%, thus making everything cheaper in one stroke. (It also killed the govt revenue). People loved things getting cheaper.
2. The minimum Income Tax threshold was changed from 5 Lakhs per annum to 30 Lakhs! Very few earned more than 30L!
A very large part of the population became tax exempt. This was very popular among the salaried class.
3. For those with income over 30 Lakhs, the upper ceiling of maximum personal tax of 15% was created, so no one paid over 15% tax. For comparison, it is around 42% in India and between 40 to 60% in many developed countries.
4. Corporate tax was promised to be reduced to 14%!
Every corporate supported and funded Rajapakshas.
5. They abolished seven other taxes, including a 2% nation building tax paid by businesses.
6. Zero tax for many industries like IT services and hotels that serve tourists etc.
7. Various taxes imposed on religious institutions were promised to be scrapped. Srilanka's powerful Buddhist Monks campaigned during election times to vote for Rajpakshas.
8. Individuals and companies engaged in agriculture, fisheries and livestock farming were exempted from any taxes for the next 5 years.
9. The daily minimum wages of tea workers were raised to Rs.1000. Instantly got all their votes.
10. Minimum salary for private company employees was fixed at Rs12500 per month. Every low income family loved it.
11. Tax on retirement gratuity was reduced from 24% to 15%. All senior citizens loved it.
12. Pensions were awarded to state bank employees who were not eligible. Those employees loved it.
13. 15% VAT on apartments was scrapped. Young home buyers and construction industry loved it.
14. Fuel prices were kept artificially low. They bought Petrol from India, and still sold it at prices lower than India. No tax revenue there either.
15. In a hurry to make Srilanka a developed nation, they went on an infrastructure building spree financed by Chinese loans. Infrastructure that they could not use for productivity. Those projects became white elephants.
Rajapakshas delivered on these promises promptly as soon as they got into office. They bankrupted the country in the process.
In trying to get so many things for free, Sri Lankans actually ended up paying much higher prices.
Now, Srilankan rupee trades for Rs 310 per dollar. For an import-dependent country, this means everyone's savings got reduced by the same ratio. Their buying power decreased. Their salary did not increase in proportion to the inflation. Thus everyone actually ended up with smaller incomes.
Besides monetary issues, it destroyed the country, has caused lot of human suffering with 15 hour powercuts, lack of food, civil war and political instability....
Article by Umesh ShanmughamJoin
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