In the process of trying to deflate inflation numbers (not inflation), the Government of Sri Lanka has removed alcohol and tobacco from the new price index because they are socially undesirable (not because government taxes are driving those prices through the roof) and included for the first time mobile phone charges.
This is a positive move for a government that has imposed an additional 7.5 per cent levy on mobile charges (the government currently takes LKR 26.50 of every LKR 100 spent on mobiles through value-added and mobile-specific taxes). At least this should bury the misconception that mobiles are used only by the rich.
So mobile use is socially desirable. But not fixed phone use? Why can’t these guys get it into their heads that a phone call is a phone call?
It was later revealed that alcohol and tobacco has been removed from the CCPI (N) index on a government directive, and was justified, because it was against a government campaign against the use of intoxicants.
The Centre for Poverty Alleviation, a non-profit organization, said the move went against an International Labour Organization recommendation that price indices should not exclude items that “may be considered socially undesirable”.
Alcohol and tobacco prices frequently go up in Sri Lanka as they are taxed heavily.
In a transparent ploy, authorities had then replaced alcohol and tobacco with mobile phone charges which have been steadily falling for more than a decade and are expected to fall further.
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