VAT hike antagonises Opposition parties and most of the people
The Government’s move to hike the Value Added Tax (VAT) from 15% to 18% and to impose the 18% VAT on a host of items that had previously been exempted from the tax has generated anger among Opposition MPs and most of the people.
The Sri Lanka Podujana Peramuna (SLPP), being the dominant government party, voted in support of the VAT (Amendment) Bill to ensure its passage through Parliament. However, there were clearly reservations among some MPs regarding the Bill, no doubt mindful about possible repercussions given that President Ranil Wickremesinghe has announced 2024 as an election year.
SLPP General Secretary Sagara Kariyawasam, though, has no doubt as to who is to blame for the VAT hike. He described it as the “Aragalaya VAT” saying the VAT hike was the “biggest achievement of the Aragalaya.”
Mr. Kariyawasam said the Gotabaya Rajapaksa government reduced taxes considerably.
“Our aim was to reduce taxes, revitalise production and bring relief to the people. Unfortunately, a vocal section of the people chose to come out to the streets, scare off tourists and investors and force a democratically elected President from power. In essence, they were saying they opposed our economic policies,” he said.
Mr Kariyawasam said that as a result of the ‘Aragalaya,’ no head of state or government would be quick to
reduce taxes from now on.
“If anything, their overwhelming instinct would be to increase taxes.”
As for the SLPP General Secretary, he said his path forward is clear.
“I personally will not vote for any measure that reduces taxes anymore given where the Aragalaya has brought us. I would rather raise my hand to raise taxes since it was by raising our hands to reduce taxes that we found ourselves in this mess.”