At a ‘Seminar on Taxation’ held recently by the International Fiscal Association, a forthright and erudite presentation was made by a leading member of the Accounting Profession on the above subject.
The presentation began with a brief definition of what is meant by the ‘Private Sector’, ‘Impact’, the ‘Tax Administration’ and the ‘Fiscal Policy Strategy’ of the Government of Sri Lanka.
The objective of the fiscal strategy, as stated in the Central Bank report 1996, was cited viz, ‘to move to a sustainable budget deficit reduction path, within a medium term fiscal consolidation framework, to provide the basis for Private Sector-led non-inflationary economic growth, with external viability.’
The presentation emphasized that a Fiscal reform programme included:
o The broadening of the tax base.
o Improving the tax administration and compliance.
o Rationalising fiscal incentives.
o Closing of tax loopholes.
o Reforming public enterprises.
o Simplifying import tariff structure.
o Reducing tariff protection.
The presentation, thereafter, touched on the Private Sector’s ‘Perspective’ of the Sri Lanka tax structure and administration: under this head the paper highlighted the reasons for the ‘Private Sector’s negative feeling, of the Tax Department, as being cold and unsympathetic, where its officers are all out to make life difficult and that these officers are not subject to tax with their public sector colleagues, adds to this feeling.
The reasons adduced for the negative feeling were as follows:
(1) It is a system where many of the ‘Sharks’ get away but the ‘Sprats’ get caught.
(2) Those having tax files are harassed, while those who have none are having a relatively better time, and therefore it is better not to have a tax file.
(3) It is worthwhile trying to bribe someone and get away from the tax net than pay taxes.
(4) The tax officers are generally unfriendly and would squeeze one dry.
(5) If you stand up for your rights you would be ear-marked as a trouble maker and would be subject to further harassment, therefore it is better to give in now, and catch up on the amount paid, by evading even more later.
The paper enumerates, about nine situations to justify this negative perception of the Inland Revenue Department, by the Private Sector, and suggests attitudinal changes required to eliminate these negative perceptions, the foremost of which is that the Commissioner - General of Inland Revenue should consider himself to be a partner of the ‘Private Sector’, which is being hailed by one and all, as the engine of growth, and hence, should impress on the minds of his officers, the need for the following attitudinal changes, to maintain a harmonious relationship with his active partners, viz, the Private Sector.
The new attitude must be, by and large one of:
o Trust rather than suspicion.
o Persuasion rather than brow-beating.
o Communication rather than Springing surprises.
o Discussion rather than Ordering.
o Agreement rather than Intimidating.
o Being fair and just rather than harassing.
o Educating tax payers of the tax regime rather than Concealing new developments.
The paper also, sets out possible strategies for achieving the suggested attitudinal changes within the framework of Sri Lanka’s fiscal policy strategy.
Hence, this presentation should serve as a guide to those responsible for fiscal policy strategy, and for those entrusted with administering the ‘Tax Laws’, to eliminate the ‘Negative perceptions’ prevailing in the Private Sector, the engine of growth, and to discourage enforcement officers of venal conduct to secure personal gains. This was the consensus of opinion of the distinguished participants.
The Sunday Times of August 3 contained an article by Noel Crusz where he summarised a feature article published in the London ‘Guardian Weekend’ of July 5, titled ‘The heretic of Colombo’ concerning the Fr. Balasuriya affair.
That article was the result of some interviews made by Jonathan Steele of the ‘Guardian’ in Colombo. It contained several inaccuracies, some of which I have indicated to the Editor in London.
Among other things, I told Mr. Steele that I found several theological errors in Fr. Balasuriya’s book. But my position has always been that these errors could have been dealt with by a Board of Theologians in Sri Lanka. The whole affair has been blown out of proportion both in Sri Lanka and Rome.
Many of us maintain that the process has been marred by lack of dialogue.
In particular, the Roman Congregation for Doctrine of Faith did not reply to the rebuttal of their observations by Fr. Balasuriya. There were other errors of procedure as well.
Cardinal Ratzinger as Prefect of the Congregation for Doctrine of Faith must take responsibility for these failures.
It is in this sense that I remarked in a jocular manner that he should be sacked or removed from office. The phrase was an “off the cuff” remark which should not have figured in the London article.
I feel that enough damage has been done to many parties by stressing the sensational and provocative in this controversy.
The time has now come to dampen the fires and work for reconciliation of Fr. Tissa with the community of the Church.
It was a wise move to spotlight on the front page of The Sunday Times of 27.7.97 the harassment of senior Sunday Times journalist Iqbal Athas by un-named and elusive security forces types.
Usually the only language understood by persons who depend on brawn and firearms as a means of livelihood is counter-activity of a similar subjective (gut-related) and oppressive variety. The use of intelligent means such as an inoffensive disposition, tied up with honest exposure could not have been foreseen, because there is no evidence of such foresight and perception according to all reports over the past fourteen years or thereabouts.
What is now required is that these thugs who are the watchers be carefully and distantly watched by friends and neighbours of Mr. Athas so that even the slightest violation of civil or criminal law could be noted by several law-abiding persons and legal action initiated. The more action the better for his honest cause.
Quite frankly, most of the official denials issued to The Sunday Times need to be regarded with circumspection, because the official track record of the past is downright bad and un-reliable. There is also the recent persecution of a reputed journalist of another major newspaper which reveals official intent. It is a huge joke therefore that everyone seems “powerless” to relieve the persecution of Mr. Athas.
Are we dealing with real persons or a bunch of eunuchs? In that perverse direction the overall evidence seems overwhelming! The actual remedy is efficiency and discipline but the public accepts that the concept is absolutely Utopian.
Many of us in the Ministry of Foreign Affairs read with some amazement a review of a book by Dr. Stanley Kalpage of his 21 month mission to India by Professor Ralph Buultjens, that appeared in The Sunday Times of August 3. Both the book and perhaps even more the review, makes several insinuations against the former President, former Foreign Minister, the then Secretary and Ministry officials. We would leave it to the Foreign Ministry itself to formally comment on them in course of time.
However it seems necessary for some of us, who served in the Ministry during the period ’89-’91 covered in the book, to observe that many of Prof. Buultjen’s remarks, such as this Ministry hindered, obfuscated and consistently undercut his (Dr. Kalpage’s) efforts may reflect a newly acquired academic verbiage but make very little sense.
Dr. Kalpage writes in his book that Foreign Ministry officials resented the appointment of non-career diplomats as Heads of Missions abroad and whatever he achieved was done in spite of the unsympathetic attitude of Ministry officials which we think is a most unfortunate remark. After all, the officials who assisted him in New Delhi and Madras were also senior Ministry officials. Besides, every known Government, even the US Government, makes non- career appointments to certain designated Ambassadorial posts such as the Ambassadorship in London (for the requirement of personal affluence, I think) and most likely in such posts they would perform better than career diplomats who might be more cautious, but to say that the Ministry, in its long history, ever worked against such appointees, particularly against Dr. Kalpage who after all is a known academic, is patently unfair.
Indeed this does reflect a lack of understanding as to how the Ministry functions. For instance he also states that there was Ministry resentment that he directly telphoned the then President. I am sure there was no resentment but only an apprehension that such calls, if undertaken too often on the basis of oneupmanship, whould certainly erode the practice of teamwork that always prevailed in the Ministry when dealing with sensitive issues.
We thought it necessary to make these few observations immediately as the Foreign Ministry, in recent weeks, has come in for some very unfair and unjust criticism when every effort is being made to restore the Ministry to its customary professional level.
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