Bond issue additional burden

Obtaining US$ 500 million bond at a higher interest of 8 percent will be anadditional expenditure of US$ 40 million per year that the budget will have to provide and meet. In terms of Sri Lanka Rupees the amount that has to be collected as additional taxes every year will be Rs 4 billion for the next five years.

This will lead to higher cost of living rapidly increasing faster than anticipated and the rupee depreciating further which will increase interest calculation based on the US$ prevailing rate.

The Sri Lankan tax payer is already over burdened by the various taxes now in force. Now, new additional taxes will have to be introduced to meet this new additional interest expenditure. The cost of living will sky rocket and will be impossible to bear as
already most of the people are in dire straits and have to even forgo essential items.

By Ismeth Ghouse, Colombo 1.