- Clear signs of economic recovery
- Govt took no pleasure in hiking taxes
- Relief will be given to public at first opportunity
There is a clear improvement in the economy and many sectors have returned to normal levels, State Minister for Finance Ranjith Siyambalapitiya told the Sunday Observer in an interview. State Minister Siyambalapitiya said the masses should exercise their vote wisely at the upcoming Presidential Election without falling prey to Opposition propaganda. Government revenue has increased substantially even without traditional income streams such as car imports. As income rises, it will be possible to give tax relief to the people.
Excerpts from the interview
Q: You have said the economy is slowly getting stronger. Can you explain?
A: According to the Central Bank of Sri Lanka (CBSL) reports issued last week, the value of the rupee has decreased from Rs.363 to 307 between January 2023 and January 2024. Reserves have increased from US$ 2.2 billion to US$ 4.5 billion. The arrival of foreign tourists has increased by 200 percent.
There is no shortage of goods and foods. Statistics aside, it is possible to buy every commodity in the country today. Everyone agrees that the country has returned to normal. Looking back to September 2022, it appears that the economic problem has been mostly resolved. All these are clear signs that the economy is recovering.
Q: The President said that even though the economy seems to be strong, the people do not see it while some are making accusations
A: Our country has a traditional Opposition. The Opposition should be more flexible. They did not take up these responsibilities because they were afraid of the situation. All the parties that offer different solutions today were told to take over this country.
Did they not accept because of reluctance or fear? When someone did take over the situation and did so alone, the Opposition saw negatives. Even today these people do this as a practice.
They cannot accept that this country has returned to normality. Unfortunately, they do not get rid of this habit in this country. When a country is in this situation, a different kind of collective will is seen in other countries. But our traditional Opposition, then and now, sees no alternative but drag things on.
Q: Despite the Government saying there is no other way to improve the economy, the Opposition is trying to present alternatives?
A: Now there is clearly a positive change. So we can say that this way is right. Anyone can say “International Monetary Fund (IMF) conditions will be changed” and “there won’t be taxes if we come to power”. These are just delusions. People do understand. Despite all the positives, we are still in a difficult place. Although the Opposition said and did different things about it, when a single person took over this country, the Opposition Leader could not take over this country.
Q: The President said that VAT will be reduced. Some items will also become VAT free. What are the benefits for the people in the future?
A: We did not introduce new taxes voluntarily. As someone who lives mostly in a rural area, I know the pressure people face very well. The President is also well aware of this. Relief will be given to the public as soon as State income is stabilised. That is why even school stationery taxes are being removed.
A year ago we did not talk about development. We owed Rs.60 billion to those who engaged in minor development projects. But even after paying all that, Rs. 250 million was allocated to each Divisional Secretariat to start new projects. These projects are also set to begin in March. These are all things that people get. We will become a country that has risen to the top in a short period of time. Today, food inflation has reached three percent. Therefore, the honour should go to the leader as well as to the people.
Q: The Opposition alleges that once debt payments start, the people will have to suffer more and that this time is an interval in hell?
A: The President gave a clear answer to this. We are paying back domestic debt. Multilateral debt is paid from foreign loans. What remains are bilateral loans. These are being restructured. These loans are being arranged so that we can pay them. Today these people are happy that hell got an interval. There is no such thing. We are going ahead as planned. Restructuring is being discussed to adjust the loan instalments in such a way that we can pay them over several years.
Q: The President said that he is waiting for a temporary relief in paying debts from 2023 to 2027, and that he is ready to start paying debts again from 2027?
A: We have requested a break for the newly paid ones. During restructuring, a grace period, reduced interest rates and slashing debt were all discussed. It is a huge exercise. The IMF has given us a program to this end.
Q: Although inflation is low, people still feel the rising Cost of Living?
A: Inflation is not about the decrease in the price of goods. If so, deflation must occur. We control the rate of increase in commodity prices, but that does not mean things are better now. Everything takes time. All these programs are being prepared to take the country up from where it was.
Q: Government revenue has increased by 50 percent. The number of new businesses has increased with the revival of the economy. How do you see this progress?
A: Government revenue was 8.3 percent of the GDP. Amidst all the challenges, it has reached 11 percent today. All the tax increases were caused by the expansion of the tax network and closing of tax loopholes. We believe it can go up to 12 percent this year. But in times like this, increasing Government revenue is a serious challenge. The reason is the negative economy. Recently, the purchase of alcohol has decreased considerably. It is because of the collapse of the economy. Customs’ largest revenue comes from taxing vehicle imports. But vehicles are still not imported.
Keeping those obstacles and bringing the State income up to 11 percent means that we are in a good place. There will be greater relief in the future. We are going through difficult times and we do not hesitate to give relief at the first opportunity. Look what would have happened today if Parate powers had been removed ahead of time. If so, the banking system of this country will collapse. Small and medium scale businesses that have taken loans of more than Rs. 5 million will be affected by Parate powers. As soon as we stabilise the banks, we will temporarily remove the Parate law and provided relief to all small and medium businesses.
Q: Can we see a new change at the end of the year?
A: There will be a Presidential Election. Then a platform will be set up for those who think clearly about this country to come together. Even though people are asking for a Presidential Election, the people have a feeling about the characteristics that these people should have. It is not difficult to choose someone based on experience, education, ability to deal with international issues, ability to make decisions, and the way the country handled itself when it was in trouble. Now the people have the ability to make a good decision at the upcoming Presidential Election. People have to choose only the best person.
Q: Basil Rajapaksa, the founder and National Organiser of the Sri Lanka Podujana Peramuna (SLPP), came to the island to prepare for elections. Will there be any change in the candidature with his arrival?
A: I do not believe that. These people have an assessment about the country and the problem. It is according to those facts that the President is running this country. I do not think there will be any difference in their decisions because a different person has not emerged.
Q: It is reported that the Government and the Samagi Jana Balawegaya (SJB) are engaged in a battle to increase their stake in the upcoming elections. It is also reported that a group of people from other parties will join the Government?
A: Clearly, they will join this program at a critical moment. It is clear that an unimaginable number of people will gather around the President.
Translated by – Jonathan Frank
