Dec 03, 2013 (LBO) – A prominent opposition legislator in Sri Lanka has slammed attempts by the current administration to prune state expenditure, especially subsidies to special interest groups, which have to be financed by more taxes on the people. Farmers get fertilizer subsidies and also tax protection from imports, keeping Sri Lanka’s food prices higher than the rest of the world, critics have said.
Basic carbohydrate prices are kept high with import taxes on rice and to prevent the less affluent in particualr from moving to substitutes such as wheat, it is also taxed.
Imported potatoes are also taxed to allow landowners and cultivators in the hill country to earn rents from the rest of the population.
Critics have said that import protection particularly on maize, which keeps poultry and substitute protein prices high, could worsen protein malnutrition among children.
Sri Lanka’s elected ruling class has for decades been easily deceiving the public that the ‘government can bear the burden’ or give ‘relief’ despite the fact that the state can only re-distribute income taken from the people themselves.
The most harmless way to finance state spending is to tax the people which results in a one-off rise in prices.