A tale of two taxes and political duplicity

By Taxpayer

Rishi Sunak, a British politician of Indian descent and the current Prime Minister of the United Kingdom, recently disclosed his personal tax returns, revealing he and his wife, Akshata Murty, paid over 500,000 pounds sterling in taxes last year. This hefty sum has sparked public debate, drawing comparisons to the dire economic situation unfolding all over the world. It has particular relevance to us in the so-called “Wonder of Asia”, where citizens battle crippling inflation, intolerable cost of living, shortages of essentials and unbearable taxation. While on the surface, these appear as separate issues, a closer examination reveals deeper complexities and major underlying questions about wealth, fairness, equity, and the role of leadership in navigating economic distress in this paradise isle.

Sunak and his wife, Akshata Murty, the daughter of an Indian billionaire, have been subject to intense scrutiny regarding their considerable wealth and tax contributions. Despite Murty’s substantial inheritance, Rishi Sunak has been forthright about the couple’s tax payments, emphasizing their commitment to fulfilling their fiscal obligations. In an era where tax avoidance and evasion among the wealthy are hot-button issues, especially in our wonderful Motherland, Sunak’s openness about his tax affairs has garnered both praise and criticism.

Sunak’s admirable efforts at releasing his tax returns is a welcome step, offering some insight into his personal finances amidst widespread concerns about his wealth and potential conflicts of interest in the performance of his duties as a politician. Most importantly, his significant tax contribution demonstrates compliance with the law and highlights his personal financial attributes in a see-through manner. However, critics argue that focusing solely on the total amount ignores the underlying details.

A large portion of their income came from capital gains, taxed at a lower rate than income tax. Additionally, Murty’s non-domiciled status in the UK meant she initially avoided paying taxes on foreign earnings, but later opted to pay UK tax on all her worldwide income, mainly to quell public criticism. These nuances leave some people questioning the true fairness of their tax liabilities, particularly when compared to the average UK taxpayer.

Sri Lanka’s economic woes are starkly different amidst the worst-ever financial crisis. These issues have caused immense hardship for ordinary citizens, with many struggling to be able to afford even the basic necessities. The government, grappling with mounting debt and dwindling reserves, has been forced to impose austerity measures and seek international assistance. The situation stands in unadulterated contrast to Sunak’s personal finances, highlighting the vast disparities in economic realities between wealthy individuals and nations facing financial peril.

While comparing Sunak’s tax bill directly to Sri Lanka’s national debt is impossible, the situations raise crucial questions about equity and leadership. In Sri Lanka, public anger simmered over perceived mismanagement and corruption, leading to protests in the form of the so-called “aragalaya”, and calls for accountability and system change. In the UK too, concerns remain about the fairness of the tax system and the ability of the wealthy to navigate it differently. While Sunak has implemented policies aimed at alleviating the cost-of-living crises, some argue that they are insufficient, particularly for the most vulnerable.

Ultimately, the situations in the UK and Sri Lanka, though seemingly disparate, offer valuable lessons in navigating economic complexities. While praising Sunak’s transparency is important, it should not distract from addressing systemic issues within the UK tax system. Simultaneously, international cooperation and support are crucial to help Sri Lanka emerge from its crisis. Building bridges through responsible leadership, equitable tax policies, and international solidarity are essential steps towards a more just and sustainable future for all.

In recent years, discussions surrounding the tax contributions of public figures have become increasingly prominent, in many areas of the world and most certainly in this emerald isle as well. The spotlight often falls on politicians and high-profile individuals, scrutinizing their financial practices and contributions to the public coffers. Sunak’s openness about his tax affairs contrasts sharply with the opaque and dastardly practices of many politicians in Sri Lanka, where hidden incomes and tax evasion are rampant.

It is a well-known open secret that Sri Lankan politicians engage in dubious financial practices to conceal their wealth and evade taxes with a perfect and unwavering blind eye being turned on these miscreants by the authorities. The suspicions of exorbitant wealth hidden, in the country as well as abroad, by Sri Lankan politicians further exacerbates the sense of injustice and inequality prevailing in the country. The issue of tax evasion and hidden incomes among Sri Lankan politicians is not merely a matter of financial impropriety but also a reflection of the broader governance disparities facing the nation. Despite numerous anti-corruption measures and pledges by successive governments to combat graft and sleaze, progress remains elusive.

High-ranking political stooge types of officials continue to amass wealth through illicit means, shielded by a culture of impunity and weak enforcement mechanisms. One of the primary reasons for the persistence of tax evasion and hidden incomes among Sri Lankan politicians is the lack of accountability and transparency which is inherent in the country’s political system. The absence of robust oversight mechanisms allows corrupt individuals to operate with a licence of safety for the ability to shield their ill-gotten gains and filthy lucre from public scrutiny. Furthermore, the close ties between political elites and business interests facilitate the siphoning of public funds and the accumulation of wealth at the expense of ordinary citizens.

In contrast to the opacity and corruption prevalent in Sri Lanka’s political landscape, Rishi Sunak’s example underscores the importance of transparency and integrity in public office. As the Prime Minister of Great Britain, Rishi Sunak has not only tried hard to manage the UK’s finances responsibly but has also demonstrated a commitment to openness regarding his personal wealth and tax contributions. By setting a positive example of accountability, Sunak highlights the contrast between responsible governance and the entrenched corruption plaguing many developing nations, the topmost position of which is occupied by our Pearl in the Indian Ocean.

Addressing the issue of tax evasion and hidden incomes among Sri Lankan politicians and their stooges as well as their goons, requires a multifaceted approach encompassing legal reforms, institutional strengthening, and greater transparency. Legislative measures must be enacted to close loopholes and strengthen anti-corruption laws, ensuring that those who engage in illicit financial activities face extremely severe consequences. Additionally, independent oversight bodies should be empowered to investigate allegations of corruption and hold perpetrators accountable, aiming to put the perpetrators behind bars.

The stark disparity between Sunak’s tax transparency and the deplorable state of Sri Lankan politicians trying hard to hide their unholy incomes, underscore the urgent need for reforms within the latter. Sri Lanka’s endemic corruption and tax evasion perpetuate iniquity as well as inequality, undermine trust in democratic institutions, and hinder economic progress. Only through concerted efforts to promote honesty, transparency, accountability, and good governance can Sri Lanka hope to address these systemic challenges and fulfil its potential as a prosperous and equitable society. We cannot see any light at the end of the tunnel as there is no guarantee that even if there is a drastic political change, the newer strains of politicians would go hell for leather to put the perpetrators behind bars through our legal system.

It was Nikita Khrushchev, the leader of the Soviet Union from 1953 to 1964, who famously said: “Politicians are the same all over. They promise to build a bridge even where there is no river.” Sri Lankan politicians are no different at all; they are as bad as the rest of them in the whole wide world. Yet for all that, be rest assured, people of this country, that the Sri Lankan law-makers will never take any meaningful steps to punish other politicians of their own clan or even those belonging to other parties of various hues, even when they are well-known to be corrupt. The operative axiom is “you scratch my back, and I will scratch yours.” If we anticipate any restorative action at all to be taken in redressing corruption and tax evasion by successive generations of Sri Lankan politicians, it is likely to be an elusive expectation of monumental proportions.