The Supreme Court greenlights LG elections.

• Tug-of-war over LG election finances between Treasury and the Elections Commission

• The president stays firm on 13A amidst virulent opposition from Buddhist clergy.

• New vistas for youth are on the horizon.

Wednesday was a metaphorically dreary and gloomy day for the Ranil Wickremesinghe government as the President stepped into the parliamentary premises to deliver his policy statement.

The opposition’s top-rung members were conspicuously absent, creating the impression that the government was in dire straits. The proceedings lacked the usual spirit and atmosphere. Their view was that there was no reason for the President to prorogue Parliament, which rendered many parliamentary committees like the Committee on Public Enterprise and the Committee on Public Accounts dysfunctional. They opined that Wickremesinghe, who has become the president who has prorogued Parliament the most number of times, was obsessed with his penchant for delivering a throne speech every now and then when he felt like making one. Although the opposition benches were depleted to the core, the minority political parties were present in Parliament to listen to the president’s speech.

In his speech, President Wickremesinghe assured the youth of broad vistas for the future and an abundance of opportunities. He promised to develop policies that focus on reducing the burden on youth and providing them with ample opportunities to succeed.

Despite the president’s assurances, the strong message given by the people is that they are being squeezed by escalating prices and an irrational tax regime. The underlying truth is that the existing circumstances have forced more and more people to migrate in search of greener pastures.

The president nevertheless showed an interest in addressing issues confronting the youth. The stark reality is that he needs time to bring about economic stability.

“I don’t want to make popular decisions.” “What I really want to do is prevent a recurring financial crisis in this country,” he said.

Despite public pessimism, the president continued. He said, “I believe everyone remembers the situation the country was in when I addressed the opening of the previous session of Parliament.” You may recall the country’s situation when the last budget was presented and also what it was like seven to eight months ago. Schools were closed. Examinations could not be held. The agriculture and plantation industries had collapsed without fertilizer. Farmers were helpless. The tourism industry had declined. Power cuts of ten to twelve hours were

imposed. There was no gas to cook with, and residents in urban homes lost their ability to cook. People had to waste days waiting in lines for kerosene, petrol, and diesel. Many citizens sacrificed their lives because they were exhausted from waiting in line. Unable to bear this pressure, people took to the streets in protest.

But  the situation is different at present. Due to the measures that have been taken, we have been able to decrease this burden gradually. Now there is stability in the economy. People are somewhat comfortable. We have been able to safely guide Mother Sri Lanka a long way across a challenging course. It was not an easy journey. However, it is not yet over.

“The tax burden is felt more strongly due to the present economic crisis.” There is an extremely critical point to be considered. At present, most of the taxes are borne by the general public. Since taxes from individuals and institutions who are directly liable for taxes are not being properly collected, all Sri Lankans pay huge sums of money as indirect taxes. A large number of people who are not liable to pay taxes pay those taxes by default. These taxes are called indirect taxes. In other countries, most of the taxes are collected from people in a higher income bracket. In 2021, India will have 50% direct tax and 50% indirect tax. In Bangladesh, the direct tax is 68% and the indirect tax is 8%. Nepal’s direct tax is 31%, and its indirect tax is 69%. In Indonesia, the direct tax is 40% and the indirect tax is 60%. In Vietnam, direct tax is 31% and indirect tax is 69%. In Thailand, direct taxes are 37% and indirect taxes are 63%. In Malaysia, direct taxes account for 66% and indirect taxes for 34%. However, the situation in our country is different. In 2021, our direct tax was 21% and our indirect tax was 79%. Therefore, we should take action to rectify this tax divergence. Then the tax burden on the general public will be reduced.

The president has proposed many positive steps to be taken in addition to an anti-corruption bill that includes a stolen assets recovery act, which is an initiative by the United Nations. Among the other steps the president proposed are a truth commission to address the long-standing grievances of families of persons who went missing during the conflict and other international requirements that could be taken for the country to be able to move forward.

On the same day, scores of Buddhist monks marched toward Parliament to oppose the implementation of the 13th Amendment. The president has said it will be implemented unless party leaders decide whether or not to abolish it. Although the absence of water cannons and tear gas was stark, the protesting monks were confronted with a lukewarm response by the police. Some monks who challenged the police were seen being dragged away to clear the area.

Former Chief Minister C.V. Wigneswaran, commenting on the protest undertaken by the Bhikkus, questioned, “What do they know?” They only know Buddhism and Pali. It is better for them to concentrate on Buddhism within the confines of their temples.

He went on to say that “full implementation of the 13th Amendment is what we ought to get, and our ultimate goal is to achieve federalism.” “We won’t look back until then.”

Wigneswaran, known for his ultra-nationalist rhetoric, stoked the communal fires with his comments about federalism. However, India’s position is somewhat different. After 36 years of signing the agreement, India is now keen to implement the 13th Amendment in full. This may be a prerequisite for India’s economic assurances to Sri Lanka. There are more Sinhala nationalists who believe that this is unnecessary at this time. Former President Sirisena said that President Wickremesinghe was holding a vilakku (torch) burning from both ends, meaning the 13th Amendment on one end and the economic crisis on the other, with people agitating for the withdrawal of the unrealistic taxation imposed on the middle class.

Meanwhile, hundreds of trade unionists and others from the Ports Authority, the Ceylon Electricity Board, and the Government Medical Officers Association struck work for a day to register their unequivocal protest against the reformed tax regime, which pushes many middle-class income earners below the poverty line.

The president was unmoved. He noted that the government doesn’t enjoy putting the people in a difficult situation, but said it is extremely necessary to abide by the regulations of the International Monetary Fund if the country is to overcome the crisis situation in a comparatively shorter period. He said he wouldn’t mislead the people to get political leverage out of a crisis situation, but said the country was definitely on the path to recovery.

“We are almost there, but the journey is not yet over; in other words, it may take another year or two to stabilize the economy.”

Amidst virulent protests calling on the government to withdraw the abhorrent tax laws, the trade unions also gave ultimatums to the government.

The agitation by middle-class employees brought some relief as the Inland Revenue eventually decided to exempt certain non-monetary benefits from taxation. Professionals were, however, unsure about this move since they assumed it would only benefit the political elite of the government.

The immediate question now is whether the government will allocate sufficient funds for local government elections. Many political parties are already halfway through their campaigns to establish local administrations. Among these parties, the Samagi Jana Balawegaya (SJB) and the National Peoples’ Party (NPP) led by the JVP appear to have been making an impact throughout the country.

The perplexing question of whether the government will do everything at its disposal to defer local government elections has seemingly ended with a Supreme Court decision. A writ of mandamus on the Election Commission is not valid since it has taken on the responsibility to hold local government elections. The Supreme Court had noted that the Election Commission is bound to protect the people’s franchise.

The direct interpretation is that the Supreme Court has given the green light to move forward. The question now is about finances. Will there be another round of tug-of-war between the Finance Ministry and the Election Commission? The Director-General of the Election Commission filed an affidavit recently in the Supreme Court seeking direction from the Court on how to obtain funds that are necessary for the election.

In his affidavit to the Supreme Court, the Commissioner General of Elections, Saman Sri Ratnayake, stated that the Elections Commission has faced serious difficulty in taking the necessary steps to hold the local government election due to the failure of the Secretary to the Treasury and other relevant officials to release the required funds for the conduct of the election. He urged the Supreme Court to make appropriate orders for the Secretary to the Ministry of Finance and other officials to facilitate the holding of elections in accordance with the law and in accordance with the undertakings given by the Commission to the Supreme Court.

Ratnayake stated he was submitting this affidavit in consultation with the Chairman of the Elections Commission.

He stated that the Chairman of the Ceylon Petroleum Corporation (CPC), in his letter dated January 31, 2023, and the Chairman of the Ceylon Electricity Board (CEB), in his letter dated February 2, 2023, has informed the Chairman of the Elections Commission about the difficulties in providing electricity and fuel for the election as requested.

He maintained that the CPC and CEB have a duty to ensure the provision of fuel and electricity, respectively, for the purpose of the election and that any move to deny fuel and the supply of electricity for election purposes will result in a hindrance to the election process.

Ratnayake informed the court that an amount of 10,000 million rupees has been allocated in the annual estimates for the year 2023 for the activities of the Local Authorities Election, and this has been approved by Parliament subsequently.

He further said that though he requested the Secretary of the Ministry of Finance, Economic Stabilization, and National Policies to release the funds for the initial arrangements of the election, the said request has not been fulfilled.

He further said in his letter dated 24/01/2023, that he requested the Secretary to the Ministry of Finance, Economic Stabilization and National Policies to release 100 million rupees by the last week of January and the remaining amount to be released in the month of February.

He stated that it is not necessary to arrange the aforementioned amount of 10,000 million rupees all at once for election activity. According to data from previous elections, less than 25% of the total expenditure on elections is incurred during the run-up to elections.

But will the government release this money? The other day, the president directed that funds be allocated only to maintain essential services in the state. In the circumstances, there could be another tussle between the Election Commission and the Treasury in time to come.