Taxes needed for a country to provide basic necessities: Harin Fernando

The recent tax hike on telephone charges should have been imposed on usage, Minister of Telecommunications and Digital Infrastructure Harin Fernando said.

Dismissing requests to scrap the VAT imposed on telephone charges, Fernando pointed out that although the decision may seem like a discomfort, it is done in the best interest of the people.

“The Finance Ministry has to go by certain rules in order to find short term measures to bridge the gap in finances. However, I believe this would be a short term remedy. I am going to make sure through my ministry what we have planned and what we will implement may help the people to enjoy better services.”

Following are excerpts from the interview:

 

Q: The National Movement for Consumer Rights Protection recently held a protest in front of the Telecommunication Regulatory Commission demanding to remove the VAT on telephone bills and vowed to carry out their struggle until they receive a favourable response from the Government. Your comments?

A: Yes, a protest was held but only nine people took part in that.

Taxes are needed for a country to provide the basic necessities of people. We are actually paying for Rajapaksa’s sins. The crisis situation we are facing today is a result of massive loans obtained by the previous government. It is sad that people have forgotten that during Mahinda Rajapaksa’s time, the VAT alone was 20%. It went down to 11% and once again has come to 15%.

The Finance Ministry has to go by certain rules in order to find short term measures to bridge the gap in finances. Although it may seem like a discomfort, it is done in the best interest of the people. I would have preferred if the taxes were imposed on the higher usage or charged usage wise but I believe this would be a short term remedy. But I am going to make sure through my ministry what we have planned and what we will implement may help the people to enjoy better services.

I am not justifying the fact that imposing taxes was correct. However there is a massive amount of work that we have implemented and hoping to kick off within this year. 

We are now studying possibilities of completing the WiFi project that was stagnant. The project was halted mainly due to poor organising. I am confident that we will be able to carry out this project as planned before the end of the year. There will be wider coverage with bigger paces and people will be given better facilities.

We are starting a rigorous campaign on fibre optic; our fibre to home campaign will cover at least 100,000 households within this year. These will enhance with more facilities and more capacities. As you know, Sri Lanka has the lowest rate of data and voice call and my goal is to introduce more value added services. I want Sri Lanka to experience all the latest innovations in the telecommunication sector. 

Q: If agitation continues, will you consider scrapping taxes on telephone charges?

A: This tax could have been easily hidden. Then nobody would be able to shout about it. If the providers said they will increase the prices from Rs. 1.50 to Rs. 2.50, nobody would say anything. Without doing that, we tried to be transparent and imposed a tax. Now people are up in arms against it. I think right minded people will understand this decision was taken for the benefit of the public. I am very confident about this Government. They have a vision and a policy. People too need to realise this.

Q: What actually went wrong with the free WiFi project?

A: Well we have figured out where we went wrong. It is a brilliant proposal but it was not properly put into force. There were certain hindrances. I am hoping to do an in-depth explanation on the free WiFi proposal and why it stopped. I just concluded the report.

Currently, we have 229 sites that are ongoing up and running. So far there are 24,200 odd registered users. There are five providers; Dialog, Mobitel, SLT, Lanka Com and Lanka Bell. When a customer of one provider tries to enter another site of another provider; they don’t let you enter. This was our biggest failure. The problem is the providers don’t want to share their information. These are some of the technical issues. Now we are building a different platform. We have spoken to the providers and we have sorted it out.

Meanwhile, we have another tender coming out called Lanka Government Network. This will connect 950 government offices. When this implements every government office from an individual capacity will provide free WiFi; like a domestic WiFi machine. That will connect them separately apart from the 1000 WiFi we want to do.

Then there were other problems; for an example if you take SLT, if a customer wanted to register, he couldn’t do it online. He had to go to a teleshop to get it done which is absurd.

On the other hand, poor marketing strategies and lack of awareness; for example, Badulla bus stand is WiFi covered. I myself, living in Badulla didn’t know this.

Q: Now that you have identified new problems and come up with fresh solutions, do you have the required resources and finances to carry out these projects?

A: All of these things have been already approved and allocated the money. Everything is on the go. This will only cost us Rs. 30 million which we have already received. We will be able to finish this project in another two months. I have to guarantee that customer confidentiality will be protected. Providers need not worry about sharing their details. Confidentiality will be protected by the ICTA. They are comfortable with the solutions we have provided.

Q: You also promised free laptops and tablets for university students, smart phones for journalists and a free telephone for senior citizens.

A: We have already provided a smart phone package to government servants and Samurdhi beneficiaries. There are nearly 1.4 million Samurdhi beneficiaries. Then there are EPF registered people, a large number of media personnel. We cannot carry out these projects overnight.

Our initial plan was to offer a bunch of packages. Then the rates will be very low. What I promised in Parliament is to offer interest free loans to buy laptops for university students. For first year students we wanted to give tablets. But now we are worried about the quality of the tablets. We are looking at the option of giving them something better. We are trying to carry out a pilot project. And implement it in one university. We have been to Microsoft, we are discussing with them. If our pilot project becomes successful, we will carry out this proposal within this year.

Q: What’s the latest with regard to digitalisation?

A: We are the first ministry in Sri Lanka who put out a transparent international tender to digitalise our economy. The country, for a day, loses $2 million due to non-digitalisation. Whether it’s pensions, samurdhi or school uniforms, most of these benefits do not reach the correct people. The Finance Minister loses $ 2 million revenue a day due to this.

This is why we prioritise the digitalisation platform. It took us a long time to do it. This is going to be a highly sophisticated fully-integrated system. We will be the third country in the world after Estonia and Sweden to implement this system. If this happens, we are going to be leapfrogging to somewhere we have never been and everything else on digitalisation goes around this. From the President’s house to Parliament to ministries, provincial councils, Pradeshiya Sabhas, all state institutions will be interconnected. Anyone can get their e-government work done through their smart phone. We have put a lot of thought into this and made a huge investment to safeguard the security aspects.

Q: Is it true that you are spending nearly Rs. 4.8 million to renovate your official residence?

A: Well I am very disappointed with Anura Kumara Dissanayaka for making such lame accusations. He had no idea what he was talking about. First, he was accusing the Prime Minister for allocating Rs. 600 million to buy vehicles. Then he accused Kabir Hashim for spending Rs. 60 million for the renovation of his ministry office. The allegation against me was Rs. 4.1 million spent on construction work for my house. When you are appointed as ministers, we are given an official residence and those houses come under the Ministry of Public Administration. If these houses need renovation and if the Ministry of Public Administration does not have sufficient funds, then they put it to the relevant ministry. The house I got was falling into pieces. There was no roof and we had to repair it. The Government estimation for repairs was Rs. 27 million. Out of that, only 18% was released, which was Rs. 4 million. This is a Government asset. The estimate was done by the Government.

This is a bogus accusation. I am in shock, because this came from Anura Kumara Dissanayaka. How can a politician of that calibre, whom we respect, make such false accusations?

It is the same with allegations he made against the Prime Minister’s vehicles. The PM’s office did not have vehicles for last 10 years. The Prime Minister never requested for vehicles. It was the PM’s security division which requested for two bulletproof cars. Ranil Wickremesinghe still uses his personal vehicles. The vehicles cost only Rs. 150 million but the taxes were more than Rs. 448 million. The Prime Minister said he will put it to the Parliament and if they approve it, he will get the vehicles, if not, he will continue to use his private vehicles.

Kabir Hashim’s accusation; it was a Rs. 60 million that was passed by the Cabinet. He is a minister dealing with enterprises, banks, insurance companies. He wanted to operate from a centralised location. The BOI happens to be at the World Trade Centre. He wanted to shift his office there. He was allocated a Rs. 60 million to redo his office. But he spent only Rs. 30 million, just 50% of the approved amount.

Since lately there are many accusations against JVP I feel this is how the JVP leader is trying to counter those allegations. Dissanayaka is trying to cover up mud slung at him by slinging mud at the UNP.

Q: This Government came into power pledging to stop excessive spending on unnecessary things. Now you are trying to justify bulletproof vehicles, luxurious residences and offices are essential for ministers.

A: Well, the thing is, it is not my duty to stop renovating a house that was owned by the State which was completely destroyed. In fact, the approval to repair this house was done a long time ago. Don’t forget the fact that I still live in my private residence. The ministry has to maintain these buildings. They have a budget for that. At the end of the day, these are Government assets. In a few months time they might decide to reshuffle the ministries and I might have to move out, or there could be a government change. In such instances I am not going to take this with me.

Don’t forget, this country experienced much worst wastage of public funds. They question about Rs. 4 million but the previous regime spent billions of public funds for their personal benefit. There were no tenders. No transparency. We don’t do such things.

Q: There is heavy criticism against the Government for not celebrating the war victory. Your comments?

A: Well I have always held the view that it shouldn’t be a day of victory. It should be a day of commemoration. It is a day to commemorate everyone who lost their lives due to the war. If you see it as a victory day; then it is a victory over another. Then we are once again spreading hatred. We are talking about a 30-year-long war. How can there be a victory after a three decade long war? We have lost so many lives, time, and property because of the war. What about the innocent people who lost their lives, who were never involved in the war? This is why I always believed we shouldn’t celebrate the war victory but only commemorate the lives lost.

Q: Do you agree that your Government is losing popularity?

A: A government unpopular in the first six months is much better than a government unpopular in the last six months. If we are unpopular among people, I am happy about that because it says we are trying to implement policies. People expect us to ‘fix’ the economy ‘quickly’. They want us to put the country on the right track immediately. They don’t realise that it is not possible to carry out ‘quick fixes’. If people want long-term benefits, that cannot be done quickly. If the benefits need to be sustainable then it will take a little time. People complain about the recent tax hikes. I request them to compare the present situation with year 2014. Things were much worse at that time and don’t forget that we are the only Government after 1976 who passed a legislation to force the private sector to increase the salaries by Rs. 2500. What about the Rs. 10,000 pay hike for the public sector? Why can’t they talk about these things? We have done our part. Things will fall into place but it will take a little time. When the investments keep coming in, when the grants keep coming in when the international community feels comfortable with us, people will understand what we tried to do was correct. But they need to have patience and not easily fall into Rajapaksa’s traps.