The LTTE Gold Tax

- Extracts from UTHR(J) Reports

UTHTJ Special Report No.6 December 1995

Following the July 1983 violence, many people flocked to Jaffna determined to make it a permanent home. In 1985 people gave gold voluntarily towards the militant cause.

In 1990 the LTTE had launched its liberation tax to which each family had to contribute Rs 10,000 or 2 sovereigns of gold. Even the destitute had to pay this 'once and for all', which was explained as buying shares in the future state of Eelam. It took more than two years of pressure, harassment and even selective detention to force even those without money to borrow and pay up.

The seconnd collection was started after the army's 1990 July operation. This time the existing refugees were exempt. But others were charged varying amounts. Some businessmen were charged several lakhs. Those with family members abroad were taxed according to the number and country, irrespective of access to their money; for example, about Rs. 45,000 for a son in Switzerland. Since those living in Jaffna were increasingly poorer and the sums higher, the collection was very slow. The increased harshness of collection methods used left even LTTE supporters disturbed. Four or five persons are known to have died of heart attack during `negotiations' for the amounts to be paid. There were several scenes such as of a lady with a child falling on her knees and pleading. Amounts which could not be found were demanded with a note of menace. While the army moved nearer, collection meetings were frequently organised where some direct objections were raised: "You are going to take our money and run away". This was strongly denied, and the people were urged to somehow find the money.

The Tiger greed for gold also quickly surfaced. It has been decreed that only the LTTE could purchase gold. The price initially offered at Rs.3000 per sovereign was about 50% to 60% of the market rate. There are also restrictions on the carrying of jewellery by those leaving the North. By comparison, the Muslims the LTTE chased out of Jaffna in 1990 had to surrender all their valuables. Women then were subject to humiliating body searches with sometimes ear-rings being plucked off bleeding ears - all by women cadre. The recent extortion exercise  was observed with suppressed anger by people who had parted with their cash-in-hand to meet their payment to the LTTE and were the next day thrown out of Jaffna with nothing in hand. Owing to the monopoly the LTTE had enforced, later reports said that gold had been sold for much less than 3,000 rupees a sovereign by people desperate for cash.

UTHRJ; Report 5, Chapter 8 September 1990

Following the outbreak of war, stocks of food and fuel were taken over, and began appearing at inflated prices.  There were no social measures to protect the poorer sections.  The campaign for each household to contribute two sovereigns of gold or its equivalent and a son or daughter was aggressively pursued.  Those without the resources were taken to dig bunkers in frontline which were susceptible to shell attacks. 

UTHRJ; Report 6, Chapter 2 February 1991

In Mannar during late 1990 October, the LTTE looted the Muslims and expelled them. Immediately afterwards, the army moved in and looted the Tamils. It was all done peacefully with no fighting. So proverbial had become the army's reputation, that some LTTE persons on gold collection campaigns have asked, "Why do you want to keep your gold? If you don't give it to us, the Sri Lankan soldiers will take it from you when they come!"

UTHRJ: Report 8, Chapter 5 August 1991

The two sovereigns of gold tax per family in Jaffna is now being vigorously pursued. In some cases people had been imprisoned until the money was found. In one school near Thinnevely, about May, ten girls were picked up after school, several of them daughters of out-of-work farmers. They were released after the sovereigns were paid - often after borrowing from several friends and relatives.

UTHRJ: Report 9, Chapter 5 February 1992

The collection of gold sovereigns continues unabated. Those who have not paid already are sometimes asked to pay double or treble the amount. In many cases the householder was taken into custody and was only released after the family made arrangements to pay up.

UTHRJ: Report 13, Chapter 5 June 1994

The LTTE encountered few problems in dealing with the Church. But with the people it observed some caution. Its collection of 2 sovereigns of gold or the equivalent in cash, more or less compulsory in Jaffna irrespective of affordability, was only directed south Vanni at people rich by local standards. Such a person would be say a farmer who owned a tractor. Non payment exposed them to having the tractor borrowed by the LTTE and returned in a state where the repairs were far in excess of 2 sovereigns (Rs 10 000/-).