The People’s Struggle Alliance held a significant press conference in Nugegoda to raise awareness about the detrimental aspects of the agreement the government has signed with the International Monetary Fund (IMF). The conference also highlighted concerns regarding excise duties evaded by smuggling companies.
Pubudu Jayagoda, the Executive Member of the People’s Struggle Alliance and Secretary of Education of the Frontline Socialist Party, addressed the audience, stating, “A delegation from the IMF visited Sri Lanka this Thursday to discuss matters with the government. However, the government has yet to disclose the specifics of the agreements negotiated with the IMF. Ranil Wickramasinghe has consented to reinstate the agreement made with international sovereign bondholders in August. It is clear that this agreement favors foreign capitalist companies at the expense of the Sri Lankan populace.”
Jayagoda continued, “The current situation extends beyond the claims made by the National People’s Force during the election campaign regarding a comprehensive credit audit. They promised to address any misused or fraudulent loans to prevent repayments. Furthermore, their manifesto mentions the possibility of a new Debt Sustainability Analysis (DSA) in discussions with the IMF. Professor Anil Jayanta, who has been appointed as the President’s Economic Adviser, indicated that maintaining a debt level of 95% of the gross domestic product is misguided, and he is negotiating with the IMF for increased debt reduction. However, it appears that these narratives are being set aside in favor of traditional policies.”
He further criticized the government’s choice of Citibank for a new bond issue, stating, “This bank has a notorious history of exploiting people during the 2008 global economic crisis. It’s akin to handing a chicken coop to a fox. The actions taken here seem solely aimed at appeasing global financial interests. Neither Citibank nor the IMF is poised to provide any real relief to the Sri Lankan people.”
Jayagoda asserted, “We want to remind the government that they have not received a mandate from the people to pursue these actions. While we recognize the role of Nandalal Weerasinghe as the Central Bank Governor who engages with the IMF, it is essential to prioritize the interests of the people. Therefore, we demand his immediate removal from office. If Ranil Wickramasinghe’s policies are to be enacted, the public does not want Anurakumara to become president. To genuinely assist the populace, the government must repeal the Economic Transformation Act passed by Ranil Wickramasinghe, as this legislation restricts funding for public welfare initiatives. Maintaining this act only serves to hinder the establishment of a populist economy.”
Jayagoda emphasized that the solution to the ongoing economic crisis lies in recovering taxes evaded by wealthy companies. He highlighted that many companies in Sri Lanka have evaded substantial excise duties. “For instance, the Mendis Company failed to pay 1.2 billion rupees in taxes in 2022, and this amount is projected to rise to 3.6 billion rupees by 2023. As of September 2024, the total excise duty owed to the government by Mendis Company is 5.2 billion rupees. Additionally, Johnston’s companies have also evaded significant excise duties. Currently, the total amount of unpaid excise duties from Sri Lankan companies stands at 6.7 billion rupees. Arjun Aloysius, who owns 58% of Mendis Company, accounts for a significant portion of this unpaid tax, while 37% of Johnston’s companies have not remitted their taxes. Collectively, these two companies are responsible for 95% of the unpaid excise duties, with the remaining eight companies contributing just 5%.”
He questioned, “Why is the government, which taxes basic necessities such as rice and lentils, unable to enforce tax collection from these companies? We urge the government to stop currying favor with the Rajapaksa regime and take immediate action to uphold the law against these offenders.”
