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People have to starve to settle government's wasteful expenses “ JVP

2013 Aug 07

While cutting down their expenses masses have to pay for the wasteful spending of the government for its pageants says the Member of the Central Committee of the JVP Sunil Handunneththi.

Speaking at a media briefing held at the JVP head office at Pelawatta today (6th) Mr. Handunneththi said, “Recently, the government increased prices of certain essential commodities. The prices of food stuffs and spare parts for vehicles are being raised from time to time. We should explain the stand of the JVP in relation to the economic crisis that has cropped up with the increase in prices of these commodities.

The government talks of massive development programmes. However, there is an issue regarding masses receiving the benefits of their targets. The mid – year fiscal position report indicates the economic situation during the last four years. It’s a very important report on the current situation. The report compiled by the Central Bank, the Treasury and the Ministry of Finance states the economy has broken down. The economic growth that was 8% in the first quarter of 2012 has come down to 6% in the first quarter of 2013. Agriculture, industries and services have broken down. In relation to 2012 the speed of growth in agriculture has come down from 12% to 2%, services from 5.8% to 4.3% and industries from 10.8% to 10.7%. Export and import have come down. In relation to 2012 exports has come down by 7.8% and imports by 11.2%. The import of consumer goods has come down by 12.8%. People’s income has come down, financial circulation has come down and people’s buying power has been diminished. These are not our analysis; the Ministry of Finance accepts that people are unable to make their ends meet due to the economic environment that exists.

While the masses have to cut down their expenses they have to pay taxes for the government to spend for its wasteful pageants. People have to cut their day to day necessities to pay taxes for the government. During the first quarter of 2013 the Special Commodity Levy alone has been raised by 38.8%. As a result prices of essential commodities such as sugar, potatoes, milk powder and big onion are increasing. People, instead of earning for their living, have to earn to save the government from its economic crisis. However, the government has an answer when it increases taxes for these commodities. The government states taxes for sugar, potatoes and big onions are increased to protect local farmers. However, such decisions have not protected the local farmer. The farmer who produces himself is a consumer. The trader too is a consumer. They too have to pay taxes. The potato farmer has to pay taxes for sugar. According to fundamental principles of trade all producers are consumers as well. They cannot bear the burden of taxes. The government may come out with various arguments. In the first quarter of 2013 the government has earned 40% income from Special Commodity Levy.

On the other hand government’s income other than from taxes has come down. During this quarter this income has come down by 16.9%.

The government increases taxes of essential commodities covering behind cigarettes and liquor. There is an opinion in the society that increasing prices of cigarettes and liquor should be tolerated. Covering behind cigarettes and liquor the government has severely increased taxes of milk powder, sugar, butter and motor spare parts. Taxes for children’s milk food too have been increased. The price of cement has been increased without any records while prices of medicines too have increased drastically. People do not take medicines doctors recommend or they take only part of it as they are unable to afford the high prices of drugs.

Wearing seat belts was made compulsory. Offenders were imposed a fine. A gazette is being prepared to increase taxes for the equipment from 15% to 30%. Government’s income is fines and taxes. Agriculture and industries have broken down.

Taxes for motor spare parts have been increased from 15% to 30%.The increased taxes are for essential motor parts such as breaks, gear boxes, clutch plates, radiators, silencers, steering wheels etc. The government talks of a massive development. What does it expect from imposing higher taxes? The government increases taxes when the budget is near and reduces the prices of several items from the budget.

However, the government does not have a target or a process to settle the budget deficit. The budget deficit for 2014 has increased. The government is attempting to increase tax income to show an additional income. The government imposes taxes on masses to settle its budget deficit as well as its other expenses. It needs money to pay for its loan installments and interests. The interest the government has to pay has increased from Rs.173651 to Rs.176099. the government talks of development. Who gets benefits if there is such a development? Certainly not government’s henchmen; masses should get the benefits.

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