“Reckless Borrowing and hard taxes”

Mahinda Rajapaksa

“We have never faced a crisis as acute as the one created by the reckless borrowing of the Yahapalana Government. The people of this country should be aware of the situation that is developing,” former President Mahinda Rajapaksa says.

In a media communiqué, he states the present government is searching for more methods to tax the people.
“They [government] have announced that a Capital Gains Tax will be introduced in the coming weeks on the grounds that people accumulated a lot of wealth…… in the recent past and that this should be taxed. It is ironic that while insisting that I ruined the economy, this government says in the same breath that people earned a lot of wealth during my tenure, which has to be taxed. When ordinary people hear the phrase ‘Capital Gains Tax’ they may assume that this is a tax levied only on rich people who own ‘capital’. But what is meant by capital in this case is property owned by anybody.

“If a farmer, labourer or schoolteacher disposes of his land or house, he will have to pay a tax on the difference between the price at which he bought it and the price at which he sold it. The Capital Gains Tax is no less objectionable than the VAT and NBT increase,” he said.

Denying that his government ever procured loans for consumption, he stated that foreign loans were sought to carry out the war against terrorism and to develop infrastructure which can be used by our people for decades if not centuries.

“Today the government sees the whole nation as a cow to be milked to sustain themselves,” he said. He adds that the government has made “hasty arrangements to take a syndicated loan of up to USD 3.5 billion facilitated by a consortium of five banks. This would have been a factor causing concern to credit rating agencies.”

He asked that the government tables the loan agreement, along with the Attorney General’s observations in Parliament.

(Ceylon Today)

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