Sri Lanka loses 0.5-pct of GDP in taxes from state worker car permits

Apr 27, 2013 (LBO) – Sri Lanka has lost 38.5 billion rupees in potential revenues from imported vehicles due to tax-slashed permits given to state functionaries, a government estimate showed.

The so-called ‘car permits’ are now being sold in the secondary market and state functionaries are making tax-arbitrage profits. The practice which was carried on in the sly was made ‘legal’ this year.

Giving tax free cars to elected rulers was begun by Sri Lanka’s United National Party, a powerful faction in Sri Lanka’s ruling elite.

The same party completely exempted state workers from tax, a peculiarly egregious statist privilege, which was ended by current President Mahinda Rajapaksa.

But pay as you earn income tax of workers in state enterprises are still paid by the employer.

Equal treatment of the ruling class and ordinary citizens in taxation was one of the fundamental liberties won by people with the end of feudalism in Europe.

In France ending the tax free privileges of the aristocracy was one of the battle cries of the revolution.

Its ‘Declaration of the Rights of Man and of the Citizen (Déclaration des droits de l’homme et du citoyen)’ called for