‘Provide stimulus to places that bring in dollars’

COLOMBO: Sri Lanka opposition leader Sajith Premadasa has proposed that, before increasing taxes on dollar-earning sectors, the government “take the dollars back” from the rupee-millionaires who became dollar-millionaires after the 2019 tax cuts.

Speaking at a discussion in Tissamaharama with local safari jeep drivers and others in the tourism trade, Premadasa said Sri Lanka’s prevailing currency crisis is not something that can be resolved by putting pressure on the economy.

There is a definite need for a growth strategy, he said.

Sri Lanka’s central bank has raised interest rates to keep runaway inflation at bay, after two years of excess money printing to keep rates down and boost growth. The country is now going through its worst currency crisis in decades.

“My proposal is to not tax the avenues through which dollars enter [the economy]. Do not increase taxes for IT, or for tourism,” said Premadasa.

The government is complaining that they have no dollars, the Samagi Jana Balawegaya leader said.

“We must provide stimulus to places that bring in dollars. They must be encouraged,” he said, referring to apparel and other export industries, which he said should be given “maximum support”.

While doing this, said Premadasa, the government must raise taxes on the multi-millionaires who benefited from the 2019 cuts, which eroded government revenue, contributing to the present crisis.

“The tax cuts turned rupee millionaires to dollar millionaires.

“Before imposing more taxes, why not catch these thieves and take back their stolen dollars? Then we can tax much less. That money can be added to government revenue,” said Premadasa.

Sri Lanka’s newly gazetted tax regime, which saw a significant spike in personal income tax, was met with opposition by political parties and some professionals, while others expressed support.