Feature Article

Sri Lanka Taxes, bureaucracy limit flow of Tsunami relief

[TamilNet, Wednesday, 02 March 2005, 00:48 GMT]
In camps off the North-East coast of Sri Lanka, over 300,000 people drink water from bowsers brought in from kilometres away. Dependant on an unsustainable water source, they are unaware of the NGOs' struggle with Sri Lanka's bureacracy and fight against Government's mechanisms to throttle relief reaching NorthEast. Nor are the refugees aware of the heavy duties paid to clear high-tech water filtration systems and relief supplies that would otherwise either collect dust in a customs warehouse or distributed to other areas at the fancies of Sri Lanka's Social Services Ministry officials.

It is not just water systems that sit for days achieving nothing in customs. Other aid related items such as clothing, tents and even food await clearance amid intense humidity and heat in Katunayake airport just out from Colombo.

A few weeks after the Tsunami disaster, the Sri Lankan government returned to imposing duties and levies at full commercial rates on items of clothing, food and water purification equipment. Many Non-Governmental Organisations (NGOs) working in the region now find themselves unable to distribute supplies due to lack of funds to clear goods from customs.

S. Ramanathan, Project Development Officer at the Tamils Rehabilitation Organisation (TRO), an NGO registered with Government of Sri Lanka and working exclusively in the NorthEast, is angered by the new regulations and the attitude of customs officials in Colombo. Since the Sri Lankan Ministry of Finance declared that disaster management had moved in to reconstruction phase and consequently returned regulation on importation items to normal procedure, Mr Ramanathan has been struggling to break through a web of bureaucracy to clear donated items and deliver them to tsunami survivors in the North-East. “Here they go very slowly and rarely give approvals,” he says. “To get clearance from the government they go one by one.”

The only solution to getting supplies out of the airport and in to the hands of the people is to pay the cost of tax and duty, costs that can amount to 10 - 20% of the initial price of the goods. “The government is also extremely unfair about it,” says Ramanathan. “NGO’s don’t get special concessions.”

"The outcome of such measures are obvious, it is the victims of the tsunami who will eventually lose out," Ramanathan says. Just last week, after weeks of seeing over 40 containers of goods waiting in customs the TRO gave in and paid out the taxes required amounting to over US$50,000. “It is ridiculous,” says Mr Ramanathan. “We are not doing business; it is not for commercial purposes. Money that can be used to help refugees end up in Government's pockets.”

Even after clearing over 40 containers of goods, more relief items consigned to TRO still await clearance in customs. Items such as tents, clothing, beds, dental equipment, food, fire brigade equipment, water filtration equipment and even computers sit uselessly in the warehouse. In many cases the cost of paying duty and taxes on these items is so debilitating to an NGO that the NGO finds it easier to hand the items over to Sri Lankan government officials to distribute as they please.

Last week TRO was forced to give four containers filled with 4,900 packages of Relief Cargo to the Social Services Department, sent over from Malaysia. These packages, originally planned for distribution in the North-East are now unlikely to ever reach affected people in these regions.

It is speculated the tax and duties were introduced at the persuasion of local businesses that feared these items were depressing the price of goods in the local market.

But analysts say the amount of money and goods crossing these borders will help the Sri Lankan economy long term. With a record trade deficit recorded in 2004 the economy was pushed to crisis point. Fuelled by high inflation, soaring oil prices and uncertain political climate, the trade deficit reached $US1.95 billion in the first 11 months of 2004. Already the Sri Lankan Rupee which fell 10% against the green back in 2004 has recovered by almost 5%. There is growth opportunity and the reconstruction effort could emerge as the powerful force behind it.

Siva Subramaniam, Project Development Director at the Tsunami Relief Organisation based in Colombo disagrees with the government's reasoning behind the taxes and duties. “Local businesses benefitted greatly from tsunami,” he says. “Many NGO’s including TRO bought locally large quantities of items they needed.”

Mr Subramaniam, an Australian volunteering in Sri Lanka, urges the government to remove all hurdles in clearing goods. “It is contemptuous to make money out of tsunami because people are generous, people give their Christmas money, their children’s money,” said Subramaniam questioning the government’s motives. He notes that with NGOs forced to pay taxes and duties on relief items someone, somewhere has to miss out on donated relief. “What happens is something has to give,” he says. “So when we have a need elsewhere we have to say we don’t have any money.”

Meanwhile, the TRO is facing its own set of problems in clearing relief items through customs. Accused of sympathizing with the Liberation Tigers who control most of the North-East Sri Lanka, the TRO believes they are being victimised for assisting mainly the Tamil people in tsunami affected zones. “Every time we deal with customs they immediately ask if we are working with the LTTE,” says Mr Ramanathan. “We are not going directly to the LTTE, but we have to work with the LTTE to serve the common people. We have easy access to areas of NorthEast; most of our volunteers and staff are from NorthEast, so we can help.”

Mr Ramanathan says TRO is trying to cut down on the amount of money spent on paying taxes and duty. “We have come to a decision, we ask them to open the containers in our presence and then we take out the valuable items,” he says. “Items like clothing are not necessarily essential now, and so in many cases we are forced to leave them behind.” As the items are donated from all around the world, due to a lack of signage, TRO often does not have the knowledge of what the containers hold.

Thousands of people unsettled in camps off the North-East coast of Sri Lanka may never see the aid relief items donated from Europe, Malaysia, Australia, Canada and the United States. Even as these items get cleared, the weeks of delay seem to unnecessarily prolong some of the discomforts of the camps while the additional funding spent on taxes and duty appears to do little but limit the capacity of those there to help.

“You cant help me,” says Mr Ramanathan to customs officials in Colombo. “But please, at least let me help my people.”


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