The government has decided to increase the Nation

Building Tax from 1% to 3 %, but the expected revenue would not benefit armed forces personnel, the UNP said yesterday.

Colombo District UNP MP, Ravi Karunanayake said at a news conference that the Nation Building Tax had been initially imposed to reward war heroes for their services, but the increased revenue being targeted would not be channelled to better the lives of security forces personnel or their families. On the contrary it would be used to reduce the government’s massive debt burden, resulting from ill conceived and short sighted economic polices.

"The Mahinda Rajapaksa government refused to listen when the UNP objected to it taking high interest loans from international banks including the HSBC, but we have now been proved correct. The easiest way out of the present mess which includes dwindling foreign exchange reserves, is for the government to increase taxes, which would result in the suffering masses being strangled further."

Instead of burdening the people, Mihin Air, which has become the biggest white elephant should be closed down and the jumbo cabinet pruned drastically, he said.

Kegalle District UNP MP Kabir Hashim said that contrary to claims by Trade Minister Bandula Gunawardena, the prices of essential commodities have gone up and more so during this weeks Sinhala and Tamil New Year.

Due to the scarcity of goods they are not available at the prices being mentioned by Minister Gunawardena but at rates determined by the open market, he said. "So to claim that prices have come down is a gross misrepresentation."