Colombo (LNW): The government of Sri Lanka is set to roll out two additional taxes next year, namely, the ‘wealth tax’ and the ‘inheritance tax,’ according to a recent report by Sunday Times.

These upcoming taxes aim the boosting of the state’s revenue stream, especially in light of the underwhelming tax collections recently, which are yet to be met with the anticipated revenue projections.

A detailed analysis presented to the legislative body by the Committee on Fiscal Planning and Strategy highlights that the duty of devising the necessary frameworks for these potential tax systems rests on the shoulders of the Finance Ministry.

One of the primary reasons behind this move is the persistent budget shortfall the government has faced, primarily stemming from the expenses surpassing the revenue.

Notably, the fiscal shortfall during the first half of the year amounted to Rs 1.24 billion. Such a deficit was a consequence of the delay in repaying the international loans since last April and the enhanced state spending relative to the prior year’s first half. This included doubled interest outlays.

The government’s three pivotal revenue-collecting bodies, i.e. the Customs Department, the Inland Revenue Department, and the Excise Department, demonstrated underperformance in their tax collection duties during the 1H23.

The statistics reveal that the Inland Revenue Department gathered just Rs 696.94 billion, which is 41.81% of the targeted Rs 1.667 trillion. Similarly, the Customs collected Rs 400.07 billion, which is only 32.79% of its set goal of Rs 1.22 trillion. The Excise Department managed to amass Rs 88.963 billion, just 41% of its projected Rs 217 billion target.

Further, there are recommendations in the report suggesting enhancements to the existing digital tax-collection system, RAMIS 2.0. This comes in anticipation of the upcoming tax changes, and there are considerations to renew the contract with the Singapore-based firm responsible for the platform’s development and maintenance.

By: Isuru Parakrama

Colombo (LNW): Sri Lanka Postal Department has warned the public of two financial scams pretending to be the Dept in their respective websites and attracting people via SMS messages and / or emails.

The first scam involves a fake website resembling the Postal Department which includes an online transaction system, the Dept clarified, pointing out that Sri Lanka Post has not facilitated such a platform on its official website.  

Such scam sites request the visitors to provide sensitive details such as credit / debit card information, the Dept went on, urging the public to stay vigilant and protect themselves and others from such harmful scammers.

The second scam involves another platform pretending to be Sri Lanka Department of Post and targetting specifically Sri Lankans in their claim of postal deliveries being failed due to ‘a missing address line’, the Dept revealed.

The scammers send out SMS messages or emails requesting to log on to a website resembling their Dept’s, subsequently requesting the visitors to provide sensitive details such as credit / debit card information.

The Postal Department urged the public to not share their sensitive information such as credit / debit card details on suspicious websites as such, and encouraged the people to report any suspicious activity immediately to the Sri Lanka Department of Post.

Colombo (LNW): The United Nations Human Rights Council (UNHRC) will commence its fifty-fourth regular session today, September 11, 2023, and will hold till October 13, 2023 at the Palais des Nations in Geneva. 

The session will open at 10 a.m. on Monday, 11 September under the presidency of Ambassador Václav Bálek (Czech Republic). The opening will be addressed by the United Nations High Commissioner for Human Rights, Volker Türk. The Council will be meeting in room XX of the Palais des Nations.

During the session, the Council will hold 29 interactive dialogues with Special Procedure mandate holders, expert mechanisms and investigative mechanisms. 

It will hold interactive dialogues with the High Commissioner on his annual report, and on the human rights situations in Nicaragua and Sudan under agenda item two on the annual report of the High Commissioner and reports of his Office and the Secretary-General; in Belarus and Myanmar under agenda item four on human rights situations that require the Council’s attention; and in Ukraine and Haiti under agenda item 10 on technical assistance and capacity building. 

Further, the Council will hold two enhanced interactive dialogues with the High Commissioner, one on racial justice in law enforcement, and the other on the human rights situation in the Democratic Republic of the Congo. 

The Council will also hold an interactive dialogue with the Advisory Committee and five panel discussions on unilateral coercive measures and human rights, the integration of a gender perspective throughout the work of the Council, youth and human rights, cyberbullying against children, and the rights of indigenous peoples.  It will additionally hear presentations of country and thematic reports from the Secretary-General, including his report on reprisals against those who seek to cooperate or have cooperated with the United Nations. 

Reports and oral updates will also be presented on the human rights situations in Sri Lanka, Afghanistan and Nicaragua under agenda item two; Ethiopia, Russian Federation, Syria, Burundi, Ukraine and Venezuela under agenda item four; and in South Sudan, Cambodia, Somalia, Central African Republic, Georgia and Yemen under agenda item 10.  Towards the end of the session, the Council will appoint a total of 12 mandate holders of Special Procedures, and seven members of its Advisory Committee.

The final outcomes of the Universal Periodic Review of 14 States will also be considered, namely those of France, Tonga, Romania, Mali, Montenegro, Botswana, Bahamas, Burundi, Luxembourg, Barbados, United Arab Emirates, Israel, Liechtenstein and Serbia. 

The Council will adopt outcome documents for each review, which will include recommendations for the improvement of the human rights situation in each country.  The general debate on agenda item six on the Universal Periodic Review is scheduled to take place on the morning of 4 October.

Colombo (LNW): A Sri Lankan national has been charged with murder today (11) after the body of his wife was recovered at a hotel in Katong, Singapore, Channel News Asia disclosed in a report.

Eshan Tharaka Koottage, a Sri Lankan national of 30 years of age, is accused of murdering his wife Diyawinnage Sewwandi Maduka Kumari sometime between 10.45am and 4.42pm on Sep 9 at Holiday Inn Express Katong Square, located at 88 East Coast Road, Singapore. The charge sheet did not state how the alleged act was committed.

The accused, dressed in a white long-sleeved shirt, was handed the charge via videolink in the State Courts.

The prosecution applied for him to be remanded for one week with permission to take him out for investigations, scene revisitation and recovery of exhibits. 

The accused requested through an interpreter to speak to the Sri Lankan High Commission to engage a lawyer and asked for the state to provide him a lawyer, but was told he could not communicate with anyone at this juncture. 

He will return to court on Sep 18.

According to the police, the accused went to Marine Parade Neighbourhood Police Centre on Saturday at about 5.05pm to inform police officers that he had killed his wife at the hotel, which is beside i12 Katong shopping mall. He was then arrested.

The 32-year-old woman was found lying motionless with a slash wound in a hotel room when the police arrived. She was pronounced dead at the scene. 

A knife, believed to have been used in the incident, was recovered in the hotel room.

If convicted, he faces the death penalty.

Source: Channel News Asia

By: Staff Writer

Colombo (LNW): The Government is planning to abolish SVAT on January 1, 2024, despite strong opposition of the business sector and leading chambers of commerce.

President Ranil Wickremasinghe as the finace minister has proposed abolishing SVAT for a more formal VAT repayment method.

However, Ceylon Chamber raises concerns over govt.’s capacity to handle refund claims without SVAT saying abolishing SVAT could disrupt cash flow in various industries.

The government’s aim of abolishing SVAT was to improve existing inefficiencies rather than abolishing SVAT.

The Ceylon chamber of commerce  emphasised that a decision as impactful as abolishing the SVAT system should not be taken lightly and must be part of a broader, well-thought-out fiscal and economic strategy.

“Given the current economic climate and the potential ramifications on the export industry, we strongly recommend that the government engages in diligent planning, continuous monitoring, and a consultative approach that includes all stakeholders before making such a significant change,” the Ceylon Chamber stressed.

The finance ministry is set to introduce an efficient and proper refunding mechanism   consequent to the removal of simplified value added tax (SVAT) system reverting to normal VAT scheme.

This action has been taken by the ministry to adhere the International Monetary fund (IMF) approved economic reform program, a high ranking treasury official disclosed.

According to tax policy measures stipulated in the program, the fiscal authority is committed to significantly speeding up valid VAT refunds and abolishing the simplified VAT (SVAT) system.

The finance ministry will be revamping the VAT system by removing almost all product specific VAT exemptions, he added.

A resolution pertaining to the Value-Added Tax (VAT) and the Simplified Value-Added Tax (SVAT).will be presented in parliament shortly to revise the provisions applicable to the VAT Act abolishing the SVAT methodology.

Approximately 1.2 percent of the gross domestic product (GDP) from the tax revenue could be increased by reactivating the standard VAT, official document presented to the cabinet indicated.

The Ceylon Chamber pointed out that the move to abolish SVAT comes at a critical time when Sri Lanka has seen a significant dip in exports of over 10 percent in 2023 so far, along with a staggering 19 percent decrease in apparel exports with anticipation for weak external demand to continue.

The existing SVAT system was implemented in 2011 to address long-standing inefficiencies and delays in the VAT refund process managed by the Inland Revenue Department (IRD).

Before SVAT, many exporters were cash-strapped due to delayed VAT refunds—some for up to five or six years.

“Alarmingly, a backlog of long outstanding refunds under the SVAT system itself still remains unaddressed.

This raises questions about the government’s capacity to efficiently handle new refund claims in the absence of the SVAT system, thereby casting doubts over the operational feasibility of the planned move,” the Ceylon Chamber said in a statement.

It pointed out that the elimination of SVAT would immediately affect these exporters and also disrupt cash flow in various downstream industries and suppliers, leading to a ripple effect of financial challenges. 

Colombo (LNW): Several ministerial portfolios are likely to be reshuffled within this months, sources closer to the government disclosed.

The reshuffle said to be taking place in light of President Wickremesinghe’s preparations to travel overseas soon will see some of the government Ministers and State Ministers having disputes being changed, whilst some of them who have failed to achieve their designated targets being shifted, according to sources.

Although the final decision is yet to be made in this regard, discussions are already underway within those political parties affiliated with the Ruling Party, they added.