Sri Lanka Government is facing an obstacle in achieving the budget 2023 tax revenue target of 69 percent increase in revenue collection of Rs. 3,130 billion from this year’s estimate of Rs. 1,852 billion due to malfunctioning of Revenue Administration Management Information System (RAMIS).

The RAMIS software system introduced at Inland Revenue Department in 2016 spending around Rs. 13 billion was ot properly functioning making it impossible for tax officers to send the returns according to the 2017 policy through this system and collect the taxes.

The IRD officials have brought to the notice of the finance ministry about this matter but no action has been taken up to now

H A L Udayasiri, Secretary of the Inland Revenue Service Union said an expert committee should be appointed to look into problems in the Revenue Administration Management Information System (RAMIS).

The RAMIS system was originally to come from an Asian Development Bank loan but it had been rejected and leading to the current crisis, he claimed.

He said “The new Social Security Contribution Tax has now come. We told the Commissioner General not to put that also on this system and mess that up also. When state revenues are down the Departments gets blamed. We have also asked the Ministry (of Finance) about this.”

Udayasiri alleged that the Asian Development Bank was originally going to fund the information system in 2014 but some officials had decided to change the supplier.

“We do not know why the ADB conditions were not adhered to,” Udayasiri said. “The ADB loan was rejected. If matters were done according to what the ADB said this RAMIS system would be successful today.”

The malfunction of the RAMIS system was taken into the discussion yesterday (28) at the Committee on Public Accounts (COPA).

During the meeting, the Auditor General pointed out that the Inland Revenue Department is refusing to give him necessary details with regard to the agreement on the RAMIS system and it is a violation of the Constitution.

 As of 30 June 2022, the department has a total Rs 773 billion in tax dues, fines and interest. Out of that, Rs 201 billion could be earned without any legal obstacle while earning Rs 572 billion has been halted owing to several reasons.

The Auditor General has recognised this sum as the due income that should be charged under both RAMIS and Legacy systems.

When queried as to why the above Rs 201 billion has not been collected as yet, the department officials said the sum is being charged in instalments. COPA Chairman Kabir Hashim then instructed the officials to present a report, on how they expect to charge this sum, to the committee soon.

Furthermore, the Auditor General noted that despite giving instructions at several committee meetings to repair the RAMIS system, the Inland Revenue Department has failed to do so.

Therefore, COPA instructed the department officials to provide a report within one month on how to repair the RAMIS system and make it operational.

The third secretary of the Sri Lanka Embassy in Oman, E. Kushan has been arrested by the Criminal Investigation Department officers upon his arrival at the Bandaranaike International Airport (BIA) in Katunayake.

The official in question has been accused of allegedly being involved in the human trafficking racket where Sri Lankan females seeking foreign employment as domestic workers had been sent to Oman on tourist visas and later used for sex trafficking.

Kushan arrived in Sri Lanka at around 3.57 a.m. this morning (Nov. 29) from Muscat, Oman’s port capital, according to Ada Derana correspondent at the BIA.

On Monday (November 28), the CID obtained an open warrant for his arrest.After the incident came to light, this embassy staffer was interdicted, and his diplomatic passport was revoked.

Meanwhile, the Committee on Public Accounts (COPA) recently disclosed that complaints against the currently suspended embassy official had been made since February this year, however, a decision on the matter had been delayed.

In the wake of over 90 Sri Lankan women smuggled to Oman by several employment agencies, the officer attached to the Sri Lankan Embassy in Oman who was alleged to have committed human trafficking in Oman has been interdicted and he has now been brought to Sri Lanka for investigations, official source said

It was revealed very recently that a large number of Sri Lankan women had left for Oman to find jobs with tourist visa and many of them have become victims of human trafficking.

They have been detained and used for prostitution, it was reported. Some of the women had entered Oman by crossing the borders from Dubai and Abu Dhabi.

The Criminal Investigation Department (CID) probing the case have identified that several foreign employment agencies operating in Colombo also have supported this human trafficking.

The Oman Embassy said the Sri Lankan victims were sheltered at the safehouse for which the expenses are borne by the Sri Lanka Bureau of Foreign Employment (SLBFE). The Embassy provides welfare facilities to these female workers which includes medical assistance.

The Embassy has been continuously coordinating with the Omani authorities to facilitate early repatriation of these stranded migrant workers.

The Embassy has facilitated repatriation of over 240 female workers during this year and the Embassy said it has also sought the assistance of the International Organization for Migration (IOM) to assist such victims.

The Embassy encourages Sri Lankans who seek jobs in Oman to obtain their employment only through genuine channels.

1. Govt to study Singapore’s “Misuse of Drugs Act” which includes the death penalty for drug trafficking: may bring similar laws to combat drug menace: however, no decision on introduction of capital punishment yet.
   
2. Chairman of the Public Finance Committee Dr Harsha de Silva instructs officials of the Ministry of Finance and Trade to calculate and give the proper price at which an egg can be sold.
   
3. Opposition Leader Sajith Premadasa says SJB will take to the streets along with tens of thousands of people to protect democracy: also says “everything in this country now is working backwards”.
   
4. State Finance Minister Shehan Semasinghe solemnly assures there will not be a domestic debt hair-cut: asserts “prudent economic fundamentals are being deployed towards economic stabilization and to raise the economic growth rate to around 7 to 8% in the next 2 years”.
   
5. President of the Independent Engineers’ Association of the Electricity Board Nihal Weeraratne warns the country will have its longest power cut in history if sufficient stocks of coal are not received before 15th April: asserts 38 shipments with 60,000 MT of coal is required to meet current electricity needs, but only 4 received so far.
   
6. Bangladesh PM Sheikh Hasina says many countries have asked for assistance from Bangladesh, after it helped Sri Lanka with the USD 200mn Currency SWAP, in August 2021.
   
7. Chinese Embassy says another consignment of 1,000 MT (100,000 packs) of rice donated by China to Sri Lankan students has arrived: since June, a total of 8,000 MT of Chinese rice has been donated.
   
8. CB Governor Nandalal Weerasinghe says new Act to “strengthen Central Bank independence” and thereby “curb monetary financing of the budget and place a check on inflation” is to be enacted shortly: new law said to be a “prior action” to “unlock the IMF deal” that is yet to take place even after 8-1/2 months of negotiation.
   
9. More pilots leave SriLankan Airlines: puts carrier’s revival under pressure: compared to pre-COVID cadre of 318 pilots, the number had fallen to 265, post-COVID: current number down to 235, with nearly 40 to follow: Airline CEO Richard Nutall admits “the matter is of concern”.
   
10. Police say an Easter Sunday Terror Attack suspect, 38, who was out on bail, hacked to death in Mattakkuliya by two persons who arrived in a vehicle.

The Government has managed to net Rs. 1 trillion in revenue in the first seven months of this year, reflecting a robust 37% growth from a year earlier, Central Bank data showed.

As per the latest Central Bank data, January to July 2022 Government revenue amounted to Rs. 1,093 billion as against Rs. 799.8 billion in the corresponding period of last year.

Tax revenue has improved due to Surcharge Tax, increased Value Added Tax (VAT) rates and Telecommunication Levy, imposition of Social Security Contribution Levy and high inflation.

The increase also comes amidst the sharp contraction in the economy so far this year. Forecast is for the economy to contract by 9% in 2022.

In the first seven months, total expenditure and net lending increased by 17% to Rs. 2.1 trillion from the corresponding period of last year.

The increase is despite the expenditure rationalisation attempts, and mainly attributed to the escalation of additional expenditure on relief measures to alleviate the ripple effects of the pandemic on poor and vulnerable segments of the population.

This achievement was made in unfavourable market developments emanating from increased domestic interest rates, and escalating cost of goods and services  owing to high inflation and large depreciation of the exchange rate, among others.

The overall Budget Deficit in the first seven months was Rs. 1 trillion same as a year ago.

The CBSL has cautioned that any settlement in the near term payments of the Government that were in arrears over the past two years and thus far in 2022  could result in further deterioration of fiscal balances  unless a substantial flow of Government revenue is realised in the period ahead.

This was confirmed in its “Recent Economic Developments – Highlights of 2022 and Prospects for 2023” publication released ahead of Budget 2023 presentation.

During the seven months ending July 2022, domestic financing decreased to Rs. 1,053.4 billion compared to Rs. 1,204.6 billion a year ago.

Foreign financing recorded a net repayment of Rs. 43.3 billion during the period from January to July 2022, compared to the net repayment of Rs. 190 billion in the first seven months of 2021, the report revealed.

Sri Lanka’s power generation is on the verge of loosing the power generation of 40 percent of total energy demand as the energy ministry is grappling to solve the current coal import issue which was arisen due to no bidders for recent coal tenders.     

The supply of coal to the Lakvijaya Power Plant (LVPP) in Norochcholai has become a mission impossible for the energy ministry as nota single supplier had submitted bids to supply coal on credit basis for both term and spot tenders called by the Lanka Coal Company (LCC) recently.

This will result in further extended power cuts for long hours in the coming months if the Lanka Coal Company (LCC) is failed to award the coal supply contract to a prospective supplier as soon as possible, energy ministry sources revealed.      

The suppliers are demanding an upfront payment for the supply of coal and the government is not in position to make such payments due present dollar crisis

Therefore, the LCC is compelled to award the contract considering unsolicited proposals from suppliers, especially on Government-to-Government (G2G) basis.

The relevant advertisement calling for suppliers to submit expressions of interest / proposals to supply coal for Norochcholai power plant was published by the LCC last week and the closing date is on or before December 1.

The Lanka Coal Company has to import adequate stocks during the coal unloading season from October to April, as it can only be unloaded when the sea is calm during the period from October to April each year.

Normally it imports stocks annually through four spot tenders (300,000 MT each) and a single term tender of 1.2 million MT via at least 35 shipments and it has to be  minimum of five shipments per month.

The process of coal procurement has now turned to a cumbersome affair for state authorities following the cancellation of the awarding of spot and term tender twice within less than two months this year first over legal issue and second failure of bidders to comply with guide lines.

 The entry of the entry of two companies Browns / CMEC’s and a Dubai based firm  Coral  energy submitting bids for the second tender  has brought down the Coal pricing from $ 312per MT quoted by the first tender winner Suek AG/Black Sand to the lowest level of $ 250-290.

If the cabinet approved procurement committee has allowed to proceed the tender to one of these companies without cancelling the tender then the Lanka Coal (Pvt) Ltd would have been able to save a staggering Rs.30 billion, senior energy ministry official said.

Sri Lanka has managed to secure 240,000 MT of coal, which will be sufficient till early January next year as the full payments have been made for four shipments, which have been unloaded.

This will result in the shutdown of  Norochchcolai Lakwijaya power plant after January next year due to no supply of coal the whole of next year compelling Ceylon Electricity Board to continue the ongoing power cut keeping the people in the dark for long hours further, Energy Ministry sources divulged.

However the Cabinet of Ministers at its meeting has approved the cancellation of the second spot and term tender for the procurement of Coal recently.