Revenue collection remains indomitable challenge – President’s trade union chief

By Shamindra Ferdinando

President Ranil Wickremesinghe’s Director General of Trade Unions Saman Ratnapriya said that the failure on the part of successive governments to efficiently collect due tax revenue had undermined the national economy.

The former UNP National List MP said that uncollected tax revenue, according to parliamentary records, remained over Rs 900 bn. Therefore, uncollected colossal sums left in abeyance remained a problem, Ratnapriya told a regular media briefing at his office on the third floor of the Lake House building on Tuesday (14).

Ratnapriya said that a special unit had been established at the Presidential Secretariat in line with the overall measures to address the issue at hand.

The civil society activist said so when The Island asked him to explain how the Wickremesinghe-Rajapaksa government intended to pay the Rs. 10,000 cost-of-living allowance to 1.3 mn workers, beginning April 2024, and pay the arrears (January to March) in Oct., in stages, unless tangible measures were taken to streamline revenue collection.

At the onset of the briefing Ratnapriya explained the slow turn-around of the economy since the declaration of bankruptcy in April 2022. Ratnapriya recalled at the time UNP leader Ranil Wickremesinghe accepted the Finance portfolio, the Treasury was in two minds about paying the July 2022 public servants’ salary. Some believed the July salary should be paid in two parts, but Wickremesinghe ruled that out. “Today, the government is in a position to increase the public sector monthly cost of living allowance from Rs, 7,800 to Rs. 17,800 and pensioners’ allowance from Rs. 3,525 to Rs. 6025, an increase of Rs 2,500.

Ratnapriya emphasized that the government wouldn’t obtain loans nor print money to pay for the allowances. Instead, taxes would be collected to pay these allowances in line with overall strategy discussed and adopted to address issues at hand in consultation with international lending bodies, including the IMF and the World Bank.

Pointing out that neither President Wickremesinghe, in his capacity as the Finance Minister, nor previous administrations, had taken tangible action to collect unpaid taxes, The Island asked whether trade unions would make representations in this regard. Ratnapriya acknowledged that a country couldn’t move forward unless taxes were collected. According to him, the unit established at the Presidential Secretariat now worked with the Inland Revenue Department to enhance revenue collection efforts.

Ratnapriya alleged that those responsible for the tax collection apparatus resisted attempts to streamline the process. The trade union activist pointed out how tax authorities conveniently failed to tax casinos regardless of Treasury directive.

Ratnapriya said that implementation of digitized tax structure over the next few years would streamline the process and effectively collar those who had been dodging paying their taxes.

The Island also raised the contentious issue of successive governments allowing certain institutions, including the Central Bank and CEB, to pay the PAYE (Pay As You Earn) tax of their employees. Ratnapriya acknowledged that some institutions had done so but President Wickremesinghe stopped that practice. “As of today, institutions do not pay PAYE tax on behalf of their workers. The President’s directive is in operation. This should continue.”

Commenting on political developments, Ratnapriya said that President Wickremesinghe had already declared that presidential and parliamentary polls would be held in 2024 and 2025, respectively. The President also indicated his readiness to conduct Provincial Council polls if the country so desired, Ratnapriya said, claiming that Local Government polls would be a waste of time. Ratnapriya added that the public would have to pay the salaries of 8,700 councillors if Local Government polls were held, but now even without them those councils are functioning smoothly.

Ratnapriya insisted that the latest budget was not meant to promote the government ahead of impending national elections.

Responding to another query, Ratnapriya said that some of those who launched protest campaigns demanding Rs 20,000 actually hoped for Rs 5,000. A smiling Ratnapriya said that he knew what was going on as those trade union leaders happened to be his friends and associates. Ratnapriya insisted that the vast majority of public sector workers were happy with Rs 10,000 cost-of-living allowance. Therefore, those who intended to pursue protest campaigns demanding their original demand for Rs 20,000 wouldn’t receive any public support they required because of the dire circumstances facing the country.