The duty of Government is to encourage savings and discourage borrowings. But the policy of the Central Bank appears to be to keep the interest on deposits low so that the lendings also should have a low interest to be paid by borrowers - a ‘modes operandi’ of robbing Peter to pay Paul. The National Savings Bank was paying at one time 22% on one year’s fixed deposits, but under instructions from the Central Bank, it gradually reduced its interest rates to 13%.

On the other hand, with effect from 1/4/2002, the Minister of Finance, in the case of depositors, gives them only a tax exemption limit of Rs. 72,000 whereas all others get an exemption limit of Rs. 240,000. The depositors of the former category are mostly pensioners, who have deposited their commuted pensions or provident funds in banks in order to get a supplementary income to keep their home fires burning in these days of sky-rocketing COL Depriving them of the increase in the limit of Rs. 144,000 to Rs. 240,000 and fixing in their case a limit of Rs. 72,000 is a glaring anomaly - a sad discrimination.

The writer, therefore, hopes that the erudite Minister of Finance will take all his submissions into serious consideration, abolish this 10% tax and instruct the officers of the Inland Revenue Department not to go after sprats, but go after sharks like firms, which evade custom duties and professionals and Traders, who do not issue receipts, thereby depriving the state of thousands, nay millions of rupees!

A poor pensione
Mt. Lavinia