THE BUCK STOPS HERE!

BY Priyan Rajapaksa

It was good to hear President Anura Kumara Dissanayake speak plainly to a host of mesmerised state officials about efficiency and a new work ethic that would come into effect on 1 January.

I don’t think this will happen until 1 May after the traditional new year, the politically and economically important harvest is behind us and wasteful May Day parades have stopped.

This is my vision for Sri Lanka from 2025 onwards.

All employees in the government and private sectors will be issued letters with changes to their employment conditions on 1 March 2025. The letter must be considered, signed and returned by 15 April.

In essence, the wording will be as follows: “I agree to the revised conditions of employment; and will work without soliciting, accepting or offering any bribes, inducements, santhosams or additional payments other than my legally stipulated salary.”

And here’s the other option: “I do not agree to the revised conditions; and will opt for early retirement with three months’ pay in lieu of notice, together with my EPF and ETF dues.”

Only those willing to comply with a clean administration should report to work on 16 April. That is one side of the equation.

Now let’s try to solve the other side…

Sri Lanka’s main sources of revenue are the customs, tax and excise departments. However, these departments are unable or unwilling to collect taxes due to political interference, corruption and/or inefficiency.

It’s as if only four cylinders of an unregistered V8 vehicle are firing – and government revenue is lagging, to say the least.

The customs department will be streamlined and digitalised, and its main functions are pretty easy. The Harmonized System (HS) is a global classification employed by the World Customs Organization (WCO), and it has a six digit number that’s universal under the International Harmonized System (IHS). HS codes range from seven to 10 digits, and provide country specific product and tariff classifications.

In theory, we shouldn’t need a customs department as most of its functions can be digitalised and staff could be deployed for more productive functions. Digitalisation will also eliminate the bottlenecks and allegations of corruption. Import duty can be paid before the goods leave the port of departure.

A fallacy that’s being put forth by interested parties is that the customs department earns millions of rupees in revenue for the state. In reality, it doesn’t earn a cent; it only collects what importers pay. That is its purpose. If it doesn’t collect revenue, what is the need for a customs department?

If you watched the Face the Nation programme on 18 December last year, you’d have noted that an estimated 20 percent of customs earnings disappear into the pockets of the watchdogs!

Recently, a customs department officer visited New Zealand. It was reported that his three children are being educated there and he owns a house in that country. That’s a good lifestyle… and I’m envious.

Face the Nation also discussed how digitalisation worked very well during the COVID-19 pandemic. Customs officers worked from home and did not come into the office to interfere with the cargo or collect their booty. Even the crooked have a greater affinity for life than money. Now it seems that those officers are up to their tricks again.

Digitalisation will be an interesting battle of wills as some of these customs officers would probably have voted for the ruling political party. The stronger entity will prevail – and it has to be the government.

In 1981, Some 13,000 air traffic controllers struck work in the US. Then president Ronald Regan ruled the strike unlawful and replaced 11,000 of the strikers.

The bank strike in Sri Lanka in 1972 didn’t break the banks – many of my classmates found employment in banks at the time. If air traffic controllers and bank officers can be replaced, so can customs officers.

Excise duties will be payable on production at the stated rate of excise duty; and it will be payable before the alcohol leaves the premises of production. Since the government is not a bank, it will be up to the alcohol producers to arrange their finances.

The Inland Revenue Department (IRD) will also be digitalised; and taxes will be calculated on its system as it is done in many other countries. Manual intervention isn’t usually possible.

An automatic penalty will be imposed if tax returns are not filed on time. To upset the applecart and give taxpayers some power, if a tax assessment is not issued within 15 working days, the IRD should pay an automatic penalty and the assessing officer must be monitored.

Sri Lanka will prosper if this government can get the basics right. We all know that the country is sound, the weather is good and the climate is excellent. If people are not harassed, the nation will prosper and be happy, and the citizenry won’t become disgruntled.