The Hon. M.A.M. Thahir

¶ 01 Bismillahir Rahmanir Rahim.

¶ 02 Hon. Presiding Member, today’s debate concerns the Finance Ministry’s tax proposals. To stabilize the economy, the Government is increasing tax rates and relying on compulsory collection. Under these proposals, even a small trader doing around Rs. 100,000 turnover per day — about Rs. 36 million annually — is being brought into the tax net at around a 20.5% rate. These traders inevitably recover tax from consumers through prices.

¶ 03 Previously, large manufacturers and industrial operators in zones mainly bore such taxes. Now the Government is using the private sector as a conduit to collect indirect taxes from ordinary people; then, the same money is recycled as subsidies and schemes to secure votes. Government Members here said they will collect necessary taxes from time to time and give subsidies back. The aim clearly is electoral. You are using small traders — even tea stall owners — for this.

¶ 04 Tea that we once bought for 50 cents is now over Rs. 50; some places charge Rs. 250. A person visiting a tea stall spends not less than Rs. 500. Such stalls can reach Rs. 100,000 daily turnover, and their customers are ordinary people. Thus, the Government collects taxes from the people and then claims credit by giving them subsidies.

¶ 05 Fuel station turnover has also risen sharply because prices surged from around Rs. 100 per litre to over Rs. 400. Yet margins were reduced from about 3% to 2.2% or even 1.5%. With QR code rationing and reduced throughput, operators struggle to meet expenses and pay staff, and yet you demand taxes on their limited income. Importers pay all taxes at the point of import with the relevant forms; why burden local distributors again? Please consider relief.

¶ 06 Looking at excessive taxation, the next stated objective is to conserve dollar reserves. This is similar to Gotabaya Rajapaksa’s Government which, in the name of saving dollars, restricted fertilizer imports — a policy that derailed the country. Today, the President and Ministers say we have ample fertilizer stocks; but in our areas, farmers have not received them. If fertilizers are not applied on time, the benefits and harvest will be lost. Ampara contributes over 20% of national paddy, yet farmers there cannot even sell at Rs. 85 per kilo. Thus, two issues arise: selling paddy stored for two seasons and the fertilizer supply.