Features
Realities of Taxation and Significance of Tax Planning in individual Wealth Creation
By Chandu Epitawala
There is much discussion in Sri Lanka since the last Budget about increases in taxation and its impact on individuals (especially the middle class). There’s even some suggestion of a brain drain of skilled professionals looking for greener pastures resulting from that. Since all my previous Notes explored ways of improving the individual financial situation through personal financial management, investments, retirement planning etc., I thought it opportune to explore (in this Note 6) the issue of taxation on long-term, individual Wealth creation.
As the income level of an individual increase over time, the issue of taxation and tax planning becomes critically important. In fact, it’s so important many relocate from one tax jurisdiction to another to avoid paying (not evading taxes which is illegal) excessive taxes or to simply reduce their tax liability (and increase their savings). As far as SL migrants to the West are concerned, people are migrating from a relatively low tax regime (admittedly with poor public infrastructure and services) to a high tax (high cost) environment!!! If one is migrating (maybe for a limited time period) to tax-free (or very low) Dubai or a similar country/jurisdiction or migrating for reasons other than economic (political, security etc.) reasons, however, a case or justification can be made.
To give some macro background and context to the discussion on Taxation, Taxes in any country is generally applied or imposed by governments mainly in three broad areas of economic activity.
Income – Corporate or Individual – is the fairest way to collect taxes but is often difficult for governments in the developing world as the institutions and systems are weak and inefficient Consumption – Sales taxes, VAT, Customs/Import Duty etc. – easier for governments to collect as there is little room for consumers to avoid but regressive in nature (unfair on the lower income groups) as it’s not linked to the income. Unfortunately, the bulk of GoSL revenue is derived from this tax category.
Wealth – Mainly Capital Gains Taxes (CGT), Inheritance Taxes, Property Taxes
At the Macro level, it’s also essential to keep in mind that, other than in oil-rich countries, all other governments rely on taxation to provide good/high-quality infrastructure and public services. Some countries like Denmark annually collect as high as 45% of its GDP in Taxes while SL collects only 8%!!! OECD average is 33%. Tax collection in most other middle-income countries is in the 20s. So unless a country has oil wealth/revenue, high-quality public infrastructure and services (seen in the West) come at a price often hidden or disguised (i.e. Consumption Taxation). As they say, there is no free lunch.
Also, if you examine the case in Sri Lanka vis-a- vis the rest of the World, 80% of government revenue is raised from easy to collect consumption related taxes and wealth related taxes are very low or non-existent. So many consumer items (especially the imported ones) ranging from F&B items to vehicles are expensive/out of reach for locals earning in rupees. Many individuals/businesses who should be paying income tax escape paying their fair share of taxes because the government is unable to capture them in the tax net. It’s a well-known fact that there are less than a million income tax payers in the country (of 21 Mn). It is also well known that many high-income earners in the country, from businessmen to professionals such as tuition masters, doctors, lawyers etc., pay no (not in the tax net at all) or very little income tax.
So I would strongly argue that the government should rationalize tax collection efforts by reducing consumption-related taxes and increasing the income-related tax net or tax base and take a serious re- look at wealth related taxes, especially property taxes and capital gains tax, to create a fairer society and bring SL on par or closer with other countries in Asia and the world. The natural question for the GoSL is to ask, ” if someone is not in the tax net, where would that person/entity park/invest those extra funds?” The answer is often in real estate (land, apartments etc.) and jewellery, stocks etc., to a lesser extent. So, it makes sense to tax property (worth over Rs. 30 Mn or so) at a higher rate.
Let us look at or compare some taxes or tax rates in SL with other countries around the world to put things in perspective from the taxpayers’ or Individual citizens’ perspective. Remember, the principle of taxation is generally based on the “Residence” of the individual. If an individual resides in a country for more than 182 days in a tax year/calendar year, that individual comes under the tax jurisdiction of that location (In the case of an entity or corporate body where it’s incorporated). Also, tax avoidance (using loopholes, exemptions etc.) is legal, and tax evasion (not declaring all your income to the tax authority) is illegal in many jurisdictions, even a criminal offence in some countries.
To do a meaningful comparison among various countries, one has to consider different cost structures or Purchasing Power Parity (PPP) among countries. Roughly speaking, earnings of $1000 a month in Colombo can be compared to earnings of $3000/month in Dubai and approximately $ 4000/month in Melbourne or London. Exceptions to the rule do exist; such as even with high taxes and other cost of living conditions, it would be easier or affordable to have a decent vehicle in most countries other than in SL due to high import taxes on vehicles (which is admittedly an aspiration of many middle-class Lankans). On the other hand, in SL, it would be more affordable to have domestic help (i.e. nanny, cook, gardner, cleaner, driver etc.) than in those countries. I doubt those eager to migrate from SL to greener pastures of the developed world/West (mostly English-speaking western countries) take taxes in those countries into account when they decide to migrate.
Also, in a digital world where many jobs can be done remotely or online, and incomes can be derived from multiple sources and in multiple currencies, it is advisable to be in a low-tax jurisdiction (not to mention a low-cost location) which in turn help build wealth in the long run. Despite the recent tax increases in SL, I would argue that income tax in SL is still not high ($1000/Rs.350,000 monthly income is effectively taxed at 15% or Rs.52,000) compared to many developed countries (destinations for most SL migrants) and things like Property Taxes (Municipality Rates in SL) are still extremely low as they are not calculated on the market price of property including land value (in SL only the house or building is considered) like in most other countries.
Let us now consider some differences in taxes and their impact on Individual incomes, expenses, lifestyles and wealth using real-life examples and figures given below.If one earns $100,000 in London or Dubai, the person who lives in Dubai is $38,000 better off every year (than in the UK due to taxes), and over 10 years, this can translate into $500,000 extra accumulated savings (without counting the returns from investments etc.).
About six months ago, at the height of oil prices ($120 a barrel in the global market), the UK was selling a 95 Octane Liter at Sterling 2/Liter, and SL was selling the same product at Sterling 1/Liter (Rs.450/-). What do you reckon the difference is? Largely due to consumption taxes in the UK. A similar result if one considered a pint of beer (or most other consumer items) at a pub/mall in the UK and SL.
I have a friend in LA who pays $3,000 a month ($36,000/year) in Property Taxes on his $ 2mn property (garbage collection is an additional fee!!). This roughly works out to 1.7% of Property Tax (in most countries, Property Tax ranges between 0.3% to 2.5%) on the market value of the property every year. Some countries have a lower rate for inherited property or the primary property one lives in and a higher rate for any additional or Investment properties. Many other examples from all over the world can be given. I challenge the reader (who happens to own Property) in SL to calculate his Municipality rates as a percentage of the current market value of his/her property (including the land) and compare it with the above % range. An apartment in Colombo City which is worth Rs.100 Mn today, is paying only about Rs. 40,000 a year or 0.04% in Municipality Rates. In my case (an old, renovated House), it is only about 0.002% annually!!!!
Elon Musk (of Tesla, Twitter etc.) made some $ 11 bn in Capital Gains last year from selling Tesla shares while still a resident of California. The CGT on that was 50%!!! (37% Federal CGT and 13% CA State CGT). In the Colombo Stock Market, a similar transaction generating even billions of Rupees in Capital Gains for an Investor will attract zero CGT from the GoSL!!! By the way Mr Musk has since moved to Texas, where the State CGT is zero.
NHS Consultant Doctor in the UK who earns Sterling 150K to 170K a year pays upwards of 40% in Income Taxes, not to mention the high indirect Consumption/Sales Taxes, Property Taxes etc., as demonstrated above. A similar situation exists in any other developed country like Australia or Canada. You can ask a doctor/lawyer friend of yours in SL who has a successful private practice how much (%) of the actual earnings they pay in taxes. Or simply look at their lifestyles, and you might get the answer.
In Japan, Inheritance Taxes can go as high as 60% of the Wealth transferred to the next generation. In UK, it can range from 20-40%. SL has no such thing as Inheritance Tax (it was abolished in the 80s).
These are some of the real-life, actual examples that came to my mind. The big difference lies in income related taxes (poor/narrow tax base as well as lower rates), Capital Gains Tax and Property Taxes. Compare/contrast any number of jurisdictions or compare the SL situation with Dubai and a developed country such as the US, UK or Australia (favourite destinations for SL migrants) to highlight the impact of taxes on the standard of living as well as what one can potentially save/invest in building long term wealth. Artificial Intelligence-assisted ChatGPT will quickly do a better job in comparing these figures and rates. The following matrix will give a quick evaluation of the pros and cons of each location.
In conclusion/summary, the general thrust of my argument is as follows;
At a macro level (from the GoSL perspective) application of taxation principles and efficiency of Income Tax collection in SL needs a radical rethink and overhaul to increase the overall tax collection from the current 8% of GDP to at least 18% without hurting the lower and middle income/wealth groups. This should be done by shifting the tax focus from consumption based taxation to wealth based taxation and widening the Income Tax base so that no one (especially in the high-income groups) escapes the income tax net. Public trust in the government (with responsible handling/spending of tax money) must be restored.
Taxes in SL are significantly lower than in developed countries, but a place like Dubai, where there are few or no taxes but high-quality public infrastructure and services, offer the best of both worlds or takes the top spot.
There is a noticeable and growing global trend where many individuals (including many retirees) in high-cost/high taxes Countries seek to relocate to other low-cost, low taxes countries/locations such as Portugal, Indonesia, Thailand, Peurto Rico, Panama, Mexico etc. etc. (many of these countries now offer long term Visa schemes) precisely to enjoy a better quality of life/standard of living while enjoying warmer weather/beaches etc. The emerging Digital Economy and the opportunities it represents make such movements (for individuals with the right skills) and aspirations increasingly achievable (many countries now offer digital nomad visa schemes, even permanent residency visas etc.). For Sri Lanka as a country, this trend may be an opportunity to counter or somewhat reverse/mitigate the effects of the brain drain that is taking place.
Sri Lankans understandably migrating to the West (Australia, Canada, EU, UK, USA etc.) hoping for a better life or better standard of living may often be entertaining a misplaced dream. Working 10-20 years in the tax-free Middle East may be a far better option. If one pays attention to legally avoiding (not evading) high taxes/tax liability and opportunities they present to increase one’s savings over time and direct those savings to Investments with decent returns (i.e. create wealth), one can look forward to a comfortable and early retirement in any number of places (or in your home country/country of your birth where you are a first-class citizen) that offer residence to individuals with some accumulated wealth.
by Dr Gotabhya Ranasinghe
Senior Consultant Cardiologist
National Hospital Sri Lanka
When we sought a meeting with Hon Dr. Ramesh Pathirana, Minister of Health, he graciously cleared his busy schedule to accommodate us. Renowned for his attentive listening and deep understanding, Minister Pathirana is dedicated to advancing the health sector. His openness and transparency exemplify the qualities of an exemplary politician and minister.
Dr. Palitha Mahipala, the current Health Secretary, demonstrates both commendable enthusiasm and unwavering support. This combination of attributes makes him a highly compatible colleague for the esteemed Minister of Health.
Our discussion centered on a project that has been in the works for the past 30 years, one that no other minister had managed to advance.
Minister Pathirana, however, recognized the project’s significance and its potential to revolutionize care for heart patients.
The project involves the construction of a state-of-the-art facility at the premises of the National Hospital Colombo. The project’s location within the premises of the National Hospital underscores its importance and relevance to the healthcare infrastructure of the nation.
This facility will include a cardiology building and a tertiary care center, equipped with the latest technology to handle and treat all types of heart-related conditions and surgeries.
Securing funding was a major milestone for this initiative. Minister Pathirana successfully obtained approval for a $40 billion loan from the Asian Development Bank. With the funding in place, the foundation stone is scheduled to be laid in September this year, and construction will begin in January 2025.
This project guarantees a consistent and uninterrupted supply of stents and related medications for heart patients. As a result, patients will have timely access to essential medical supplies during their treatment and recovery. By securing these critical resources, the project aims to enhance patient outcomes, minimize treatment delays, and maintain the highest standards of cardiac care.
Upon its fruition, this monumental building will serve as a beacon of hope and healing, symbolizing the unwavering dedication to improving patient outcomes and fostering a healthier society.We anticipate a future marked by significant progress and positive outcomes in Sri Lanka’s cardiovascular treatment landscape within the foreseeable timeframe.
by Fr. Emmanuel Fernando, OMI
Jesuit Fr. Aloysius Pieris (affectionately called Fr. Aloy) celebrated his 90th birthday on April 9, 2024 and I, as the editor of our Oblate Journal, THE MISSIONARY OBLATE had gone to press by that time. Immediately I decided to publish an article, appreciating the untiring selfless services he continues to offer for inter-Faith dialogue, the renewal of the Catholic Church, his concern for the poor and the suffering Sri Lankan masses and to me, the present writer.
It was in 1988, when I was appointed Director of the Oblate Scholastics at Ampitiya by the then Oblate Provincial Fr. Anselm Silva, that I came to know Fr. Aloy more closely. Knowing well his expertise in matters spiritual, theological, Indological and pastoral, and with the collaborative spirit of my companion-formators, our Oblate Scholastics were sent to Tulana, the Research and Encounter Centre, Kelaniya, of which he is the Founder-Director, for ‘exposure-programmes’ on matters spiritual, biblical, theological and pastoral. Some of these dimensions according to my view and that of my companion-formators, were not available at the National Seminary, Ampitiya.
Ever since that time, our Oblate formators/ accompaniers at the Oblate Scholasticate, Ampitiya , have continued to send our Oblate Scholastics to Tulana Centre for deepening their insights and convictions regarding matters needed to serve the people in today’s context. Fr. Aloy also had tried very enthusiastically with the Oblate team headed by Frs. Oswald Firth and Clement Waidyasekara to begin a Theologate, directed by the Religious Congregations in Sri Lanka, for the contextual formation/ accompaniment of their members. It should very well be a desired goal of the Leaders / Provincials of the Religious Congregations.
Besides being a formator/accompanier at the Oblate Scholasticate, I was entrusted also with the task of editing and publishing our Oblate journal, ‘The Missionary Oblate’. To maintain the quality of the journal I continue to depend on Fr. Aloy for his thought-provoking and stimulating articles on Biblical Spirituality, Biblical Theology and Ecclesiology. I am very grateful to him for his generous assistance. Of late, his writings on renewal of the Church, initiated by Pope St. John XX111 and continued by Pope Francis through the Synodal path, published in our Oblate journal, enable our readers to focus their attention also on the needed renewal in the Catholic Church in Sri Lanka. Fr. Aloy appreciated very much the Synodal path adopted by the Jesuit Pope Francis for the renewal of the Church, rooted very much on prayerful discernment. In my Religious and presbyteral life, Fr.Aloy continues to be my spiritual animator / guide and ongoing formator / acccompanier.
Fr. Aloysius Pieris, BA Hons (Lond), LPh (SHC, India), STL (PFT, Naples), PhD (SLU/VC), ThD (Tilburg), D.Ltt (KU), has been one of the eminent Asian theologians well recognized internationally and one who has lectured and held visiting chairs in many universities both in the West and in the East. Many members of Religious Congregations from Asian countries have benefited from his lectures and guidance in the East Asian Pastoral Institute (EAPI) in Manila, Philippines. He had been a Theologian consulted by the Federation of Asian Bishops’ Conferences for many years. During his professorship at the Gregorian University in Rome, he was called to be a member of a special group of advisers on other religions consulted by Pope Paul VI.
Fr. Aloy is the author of more than 30 books and well over 500 Research Papers. Some of his books and articles have been translated and published in several countries. Among those books, one can find the following: 1) The Genesis of an Asian Theology of Liberation (An Autobiographical Excursus on the Art of Theologising in Asia, 2) An Asian Theology of Liberation, 3) Providential Timeliness of Vatican 11 (a long-overdue halt to a scandalous millennium, 4) Give Vatican 11 a chance, 5) Leadership in the Church, 6) Relishing our faith in working for justice (Themes for study and discussion), 7) A Message meant mainly, not exclusively for Jesuits (Background information necessary for helping Francis renew the Church), 8) Lent in Lanka (Reflections and Resolutions, 9) Love meets wisdom (A Christian Experience of Buddhism, 10) Fire and Water 11) God’s Reign for God’s poor, 12) Our Unhiddden Agenda (How we Jesuits work, pray and form our men). He is also the Editor of two journals, Vagdevi, Journal of Religious Reflection and Dialogue, New Series.
Fr. Aloy has a BA in Pali and Sanskrit from the University of London and a Ph.D in Buddhist Philosophy from the University of Sri Lankan, Vidyodaya Campus. On Nov. 23, 2019, he was awarded the prestigious honorary Doctorate of Literature (D.Litt) by the Chancellor of the University of Kelaniya, the Most Venerable Welamitiyawe Dharmakirthi Sri Kusala Dhamma Thera.
Fr. Aloy continues to be a promoter of Gospel values and virtues. Justice as a constitutive dimension of love and social concern for the downtrodden masses are very much noted in his life and work. He had very much appreciated the commitment of the late Fr. Joseph (Joe) Fernando, the National Director of the Social and Economic Centre (SEDEC) for the poor.
In Sri Lanka, a few religious Congregations – the Good Shepherd Sisters, the Christian Brothers, the Marist Brothers and the Oblates – have invited him to animate their members especially during their Provincial Congresses, Chapters and International Conferences. The mainline Christian Churches also have sought his advice and followed his seminars. I, for one, regret very much, that the Sri Lankan authorities of the Catholic Church –today’s Hierarchy—- have not sought Fr.
Aloy’s expertise for the renewal of the Catholic Church in Sri Lanka and thus have not benefited from the immense store of wisdom and insight that he can offer to our local Church while the Sri Lankan bishops who governed the Catholic church in the immediate aftermath of the Second Vatican Council (Edmund Fernando OMI, Anthony de Saram, Leo Nanayakkara OSB, Frank Marcus Fernando, Paul Perera,) visited him and consulted him on many matters. Among the Tamil Bishops, Bishop Rayappu Joseph was keeping close contact with him and Bishop J. Deogupillai hosted him and his team visiting him after the horrible Black July massacre of Tamils.
Sri Lanka-Singapore Free Trade Agreement
By Gomi Senadhira
senadhiragomi@gmail.com
“You might tell fairy tales, but the progress of a country cannot be achieved through such narratives. A country cannot be developed by making false promises. The country moved backward because of the electoral promises made by political parties throughout time. We have witnessed that the ultimate result of this is the country becoming bankrupt. Unfortunately, many segments of the population have not come to realize this yet.” – President Ranil Wickremesinghe, 2024 Budget speech
Any Sri Lankan would agree with the above words of President Wickremesinghe on the false promises our politicians and officials make and the fairy tales they narrate which bankrupted this country. So, to understand this, let’s look at one such fairy tale with lots of false promises; Ranil Wickremesinghe’s greatest achievement in the area of international trade and investment promotion during the Yahapalana period, Sri Lanka-Singapore Free Trade Agreement (SLSFTA).
It is appropriate and timely to do it now as Finance Minister Wickremesinghe has just presented to parliament a bill on the National Policy on Economic Transformation which includes the establishment of an Office for International Trade and the Sri Lanka Institute of Economics and International Trade.
Was SLSFTA a “Cleverly negotiated Free Trade Agreement” as stated by the (former) Minister of Development Strategies and International Trade Malik Samarawickrama during the Parliamentary Debate on the SLSFTA in July 2018, or a colossal blunder covered up with lies, false promises, and fairy tales? After SLSFTA was signed there were a number of fairy tales published on this agreement by the Ministry of Development Strategies and International, Institute of Policy Studies, and others.
However, for this article, I would like to limit my comments to the speech by Minister Samarawickrama during the Parliamentary Debate, and the two most important areas in the agreement which were covered up with lies, fairy tales, and false promises, namely: revenue loss for Sri Lanka and Investment from Singapore. On the other important area, “Waste products dumping” I do not want to comment here as I have written extensively on the issue.
1. The revenue loss
During the Parliamentary Debate in July 2018, Minister Samarawickrama stated “…. let me reiterate that this FTA with Singapore has been very cleverly negotiated by us…. The liberalisation programme under this FTA has been carefully designed to have the least impact on domestic industry and revenue collection. We have included all revenue sensitive items in the negative list of items which will not be subject to removal of tariff. Therefore, 97.8% revenue from Customs duty is protected. Our tariff liberalisation will take place over a period of 12-15 years! In fact, the revenue earned through tariffs on goods imported from Singapore last year was Rs. 35 billion.
The revenue loss for over the next 15 years due to the FTA is only Rs. 733 million– which when annualised, on average, is just Rs. 51 million. That is just 0.14% per year! So anyone who claims the Singapore FTA causes revenue loss to the Government cannot do basic arithmetic! Mr. Speaker, in conclusion, I call on my fellow members of this House – don’t mislead the public with baseless criticism that is not grounded in facts. Don’t look at petty politics and use these issues for your own political survival.”
I was surprised to read the minister’s speech because an article published in January 2018 in “The Straits Times“, based on information released by the Singaporean Negotiators stated, “…. With the FTA, tariff savings for Singapore exports are estimated to hit $10 million annually“.
As the annual tariff savings (that is the revenue loss for Sri Lanka) calculated by the Singaporean Negotiators, Singaporean $ 10 million (Sri Lankan rupees 1,200 million in 2018) was way above the rupees’ 733 million revenue loss for 15 years estimated by the Sri Lankan negotiators, it was clear to any observer that one of the parties to the agreement had not done the basic arithmetic!
Six years later, according to a report published by “The Morning” newspaper, speaking at the Committee on Public Finance (COPF) on 7th May 2024, Mr Samarawickrama’s chief trade negotiator K.J. Weerasinghehad had admitted “…. that forecasted revenue loss for the Government of Sri Lanka through the Singapore FTA is Rs. 450 million in 2023 and Rs. 1.3 billion in 2024.”
If these numbers are correct, as tariff liberalisation under the SLSFTA has just started, we will pass Rs 2 billion very soon. Then, the question is how Sri Lanka’s trade negotiators made such a colossal blunder. Didn’t they do their basic arithmetic? If they didn’t know how to do basic arithmetic they should have at least done their basic readings. For example, the headline of the article published in The Straits Times in January 2018 was “Singapore, Sri Lanka sign FTA, annual savings of $10m expected”.
Anyway, as Sri Lanka’s chief negotiator reiterated at the COPF meeting that “…. since 99% of the tariffs in Singapore have zero rates of duty, Sri Lanka has agreed on 80% tariff liberalisation over a period of 15 years while expecting Singapore investments to address the imbalance in trade,” let’s turn towards investment.
Investment from Singapore
In July 2018, speaking during the Parliamentary Debate on the FTA this is what Minister Malik Samarawickrama stated on investment from Singapore, “Already, thanks to this FTA, in just the past two-and-a-half months since the agreement came into effect we have received a proposal from Singapore for investment amounting to $ 14.8 billion in an oil refinery for export of petroleum products. In addition, we have proposals for a steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million), sugar refinery ($ 200 million). This adds up to more than $ 16.05 billion in the pipeline on these projects alone.
And all of these projects will create thousands of more jobs for our people. In principle approval has already been granted by the BOI and the investors are awaiting the release of land the environmental approvals to commence the project.
I request the Opposition and those with vested interests to change their narrow-minded thinking and join us to develop our country. We must always look at what is best for the whole community, not just the few who may oppose. We owe it to our people to courageously take decisions that will change their lives for the better.”
According to the media report I quoted earlier, speaking at the Committee on Public Finance (COPF) Chief Negotiator Weerasinghe has admitted that Sri Lanka was not happy with overall Singapore investments that have come in the past few years in return for the trade liberalisation under the Singapore-Sri Lanka Free Trade Agreement. He has added that between 2021 and 2023 the total investment from Singapore had been around $162 million!
What happened to those projects worth $16 billion negotiated, thanks to the SLSFTA, in just the two-and-a-half months after the agreement came into effect and approved by the BOI? I do not know about the steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million) and sugar refinery ($ 200 million).
However, story of the multibillion-dollar investment in the Petroleum Refinery unfolded in a manner that would qualify it as the best fairy tale with false promises presented by our politicians and the officials, prior to 2019 elections.
Though many Sri Lankans got to know, through the media which repeatedly highlighted a plethora of issues surrounding the project and the questionable credentials of the Singaporean investor, the construction work on the Mirrijiwela Oil Refinery along with the cement factory began on the24th of March 2019 with a bang and Minister Ranil Wickremesinghe and his ministers along with the foreign and local dignitaries laid the foundation stones.
That was few months before the 2019 Presidential elections. Inaugurating the construction work Prime Minister Ranil Wickremesinghe said the projects will create thousands of job opportunities in the area and surrounding districts.
The oil refinery, which was to be built over 200 acres of land, with the capacity to refine 200,000 barrels of crude oil per day, was to generate US$7 billion of exports and create 1,500 direct and 3,000 indirect jobs. The construction of the refinery was to be completed in 44 months. Four years later, in August 2023 the Cabinet of Ministers approved the proposal presented by President Ranil Wickremesinghe to cancel the agreement with the investors of the refinery as the project has not been implemented! Can they explain to the country how much money was wasted to produce that fairy tale?
It is obvious that the President, ministers, and officials had made huge blunders and had deliberately misled the public and the parliament on the revenue loss and potential investment from SLSFTA with fairy tales and false promises.
As the president himself said, a country cannot be developed by making false promises or with fairy tales and these false promises and fairy tales had bankrupted the country. “Unfortunately, many segments of the population have not come to realize this yet”.
(The writer, a specialist and an activist on trade and development issues . )
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