Dr. Harsha de Silva, an economic expert of the Samagi Jana Balawega (SJB), said that President Ranil Wickramasinghe brought him into politics and he learned politics from the President, emphasizing that there is no personal grudge between the President and himself.
Dr. de Silva expressed these views today in Parliament.
He pointed out that the economic reforms presented by President Ranil Wickramasinghe are essential for the economy. He also stated:
“There is no problem with the economic reforms presented by Ranil Wickramasinghe. Reforms are essential.
“But what he has forgotten and does not understand is reform with relief. That means how to save the people who are facing hardships when these reforms are implemented.
“Some say that the IMF agreement cannot be changed. This is absurd. Firstly, those who did not agree to reach out to the IMF claim that the agreement cannot be amended. Are you telling us that you cannot change a single thing in the agreement you signed?
“We are changing it. When you say it is not possible, we will do it, and the numbers will show how it will be done.
“Sajith Premadasa spoke directly to Peter Brewer, insisting that there should be concessions along with the reform. We are changing this agreement. We went to Iran. Kabir and I explained it at length.
“There is a structural problem with this IMF agreement.
“Why do we say that? Because we have an issue with foreign debt.
“Growth is not growth itself. Export-oriented growth earns dollars, but local production earns rupees. We need dollars to pay the debt. Therefore, we need an economy that generates dollars through export-oriented economic activities. We are giving the opportunity to the entrepreneurs of this country to implement an export-oriented economy. We will change those tax policies.
“They say that our tax policies cannot be changed. We say tax policies can be changed. We accept the IMF target of collecting 15.8 percent of taxes compared to the gross domestic product by 2029. So don’t argue with us. We’re not going to deviate from that. We accept that responsibility. We accept that responsibility by creating tax fairness.
“Let me tell you one thing. You will be surprised when you hear this. We impose taxes. However, there are two ways to do that. One is to impose tax based on income. There is a big discussion about this. In January 2023, it was expected to collect 68 billion from the PAYE tax. Then it was changed to 100 billion.
“But with this, they are going to earn 146 billion. Therefore, we pointed out that there is no need for a 36 percent tax. We wrote that to the Finance Minister. But to date, no answer has been received.
“Now, in 2024, it was changed to 160 billion. Today I say, Mr. Speaker, write this down: If it goes this way, these people will bring in 200 billion.
“Voluntary taxes were estimated at 105 billion. By the end of 2023, only 48 billion have been collected. It was changed to 80 billion. However, by the end of this year, we will only collect around 39 or 40 billion.
“Taxes are imposed on those who are unable to pay. But at the same time, those who are capable do not pay taxes. As citizens, everyone has a responsibility. As a country, citizens have a responsibility to pay taxes.
“We keep the middle class at a maximum tax rate of 24%. People who earn millions of salaries have to pay 36% as tax.”
