Hacker News Reader

Comment by jdasdf | Hacker News Reader

Here's an article about the tax cuts, which happened in 2019:

https://www.outlookindia.com/business/sri-lanka-lost-around-...

Excerpts:

> [Finance Minister] Sabry told Parliament on Thursday that Sri Lanka lost about 500,000 taxpayers each in 2020 and 2021 after the ill-timed tax cuts were delivered.

> However, even before these tax cuts, Sri Lanka was a country with one of the lowest revenue-to-GDP ratios in the world, and the 2019 tax cuts drove Sri Lanka closer to the bottom of this list, the report said.

> Sabry on Wednesday had called the 2019 tax cuts a “historic mistake.”

It seems you would at least need to take this into account in any analysis of the causes of the current situation.

Sri Lankan taxes are collected in Sri Lankan ruppees, not in USD dollars. The Sri Lankan state does not have a lack of Sri Lankan rupees, and indeed it can print as many as it wants.

Sri Lankan ruppees are not used in international trade, which is core to the current crisis.

I understand that statists like you like to pretend like the cause of every problem is lack of government, but I can assure you, that is not the case, not here, not in almost every other situation.

Maybe try being a little less confrontational with people if you want to have actual dialog. Otherwise many people just write you off and, worse, flag your posts.

Lack of government is not the issue being raised. Bad government is.

I take it by your attempt to pigeonhole me that you're some variety of libertarian. In that case, your hostility is misplaced. What you're actually angry at is the fact that the world is not compatible with your political fantasy.

> The roots of the crisis lie in tax cuts enacted by President Gotabaya Rajapaksa in late 2019, which came months before the COVID-19 pandemic that battered the country's lucrative tourism industry and led to a drop in foreign workers remittances.

The tax cuts caused annual public revenue losses of about 800 billion rupees, the prime minister's office said in its statement.

The new tax regime and COVID-19's impact, together with the pandemic relief measures, widened the budget deficit significantly to 12.2% of GDP in 2021 from 9.6% of GDP two years earlier.

[0] https://www.reuters.com/markets/rates-bonds/crisis-hit-sri-l...

I'm sorry, but a budget deficit of 9.6% of GDP isn't exactly a healthy level either.

And before that it was the declining fishing exports. This county basically has nothing else than fishing and tourism.

And on top: terrible policies, populism and too many government positions that had to be paid by printed money.

The IMF bailed them out over 15 times already.

At some point we much realize that reforms failed.

Reply on news.ycombinator.com