Claw back rich through tax system – Dr. Ganeshan Wignaraja

Sri Lanka needs to create strong universal cash transfers whilst clawing back richer people through the tax system to combat the issue of poverty, says Dr. Ganeshan Wignaraja.

“The poor are the ones who will often bear the brunt especially due to certain policy measures, particularly in the case of fuel and food subsidies which are important.”

I think there’s an interesting debate about whether the transfers should be targeted or whether they should be unconditional. I think that means testing isn’t so good in Sri Lanka and therefore I would suggest universal cash transfers and for the richer people could be clawed back through the tax system.”

Dr. Wignaraja, Senior Fellow National University of Singapore, Senior Research associate Overseas Development Institute, told a seminar organized by Centre for Banking Studies, held under the theme, ‘Confronting the Current Foreign Exchange Crisis in Sri Lanka ; Lessons from Global Experience’.

In addition, Dr. Wignaraja stressed the need for Sri Lanka to implement a structural adjustment program for inclusive growth whilst cutting red tape, promoting exports and dealing with barriers to foreign investment to spur the growth side.

He said these measures will be important, as a complement to the IMF program which will undoubtedly bring some austerity with it.