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Government says tax percentage cannot be further increased

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By: Staff Writer

Colombo (LNW): The government has informed the International Monetary Fund (IMF) that the tax percentages can not be increased further at this juncture as requested and that the government was expecting to initiate discussions to request the IMF to reconsider its request, Minister Wijeyadasa Rajapakshe said.

He told Parliament that the IMF informed the government that tax revenue should be increased to some extent by the end of the first quarter of next year.

The Minister said if the tax revenue is to be increased, the tax percentage will have to be increased and that the government has informed the IMF that people cannot be burdened with more taxes at this juncture.

The Minister said this clarifying matters raised by the Opposition MPs that the IMF’s second tranche is delayed as the government has failed to fulfil the conditions of the IMF.

“It is not an issue of not implementing the IMF conditions. The IMF is expecting Sri Lanka to obtain tax revenue to a certain target by the end of the first quarter next year.

We have to increase the existing tax percentage to meet that tax revenue targets. We informed the IMF that the government is not in a position to further burden the people with taxes. The IMF stresses the need to increase tax revenue,” he said.

The Minister said the next round of discussions with the IMF is to request them to reconsider their request on increasing tax revenue.

Sri Lanka’s economy is expected to grow by 1.7% in 2024 after contracting by 3.8% in 2023, says the World Bank in its twice-a-year update, while signaling that the outlook is clouded with uncertainty and that growth prospects depend on progress with debt restructuring and the implementation of critical structural reforms.

The Sri Lanka Development Update, Mobilizing Tax Revenue for a Better Future, says that improved revenue mobilization is critical to Sri Lanka’s return to macroeconomic stability.

The country has one of the lowest tax-to-GDP ratios in the world. By 2022, the tax system was characterized by low, multiple, and frequently changing rates, a narrow and shrinking base, a high tax burden on labor rather than capital incomes, an over-reliance on indirect taxes, and a weak administration with poor compliance outcomes.

These features have made the system complex, inefficient and inequitable.A government-led tax reform package has been under implementation since May 2022.

Faris H. Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka. Said “Current efforts to mobilize tax revenue should be coupled with continued reforms towards transparency of expenditures to build public confidence and to deliver better public services.”

The effective implementation of a Tax Administration Modernization Strategy will be essential to ensure that tax policy reforms translate into a sustained increase in revenue collection.

Core priorities should include the promotion of e-filing, the utilization of third-party information to strengthen compliance risk management, streamlining dispute resolution, and the recovery of taxes in default.

Inaugural Indo-Lanka passenger ferry service begins today.

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By: Staff Writer

Colombo (LNW): The Shipping Corporation of India, Mumbai in conjunction with the High Commission of India and the Ministry of Port, Shipping and Aviation to launch a new passenger service linking South India and North of Sri Lanka.

The new passenger service would operate from Nagapattinam, India to the port of Kankesanthurai (KKS) Jaffna and vice versa, Indian high commission official said.

The vessel deployed will be High-Speed Craft (HSC) Cheriyapani and the inaugural call will be made at the KKS port on 6 October 2023.

The new passenger service would offer an excellent opportunity for the people of India to make low-cost travel to Jaffna, Sri Lanka further strengthening historical ties between the two nations.

The transit time between the two ports will be just 3 hours and to make the travel more economical the operators are willing to offer a 50 Kg free baggage allowance.

The passenger vessels will be handled at the brand new passenger terminal recently built by the Sri Lanka Ports Authority (SLPA) at a cost of Rs. 450 million opening a new era of maritime travel and tourism for the Northern region.

Asha Agencies Ltd., (Pership Group Company) who are the local agents of SCI would serve as the General Sales Agent.

A journey in the Nagapattinam-Kankesanthurai sector, which is about 64 nautical miles long, is estimated to take three-and-a-half to four hours.

A ferry can carry 150-200 passengers Indian Prime Minister Narendra Modi announced the launch of the service in New Delhi recently.

On July 14, the India-Sri Lanka Joint Committee held a virtual meeting. It discussed the resumption of the ferry service between the two countries from mutually agreed points.

Rajesh Kumar Sinha, Additional Secretary, Union Ministry of Ports, Shipping and Waterways, led the Indian team. K.D.S. Ruwanchandra, Secretary, Ministry of Ports, Shipping and Aviation, headed the Sri Lankan side.

The announcement has triggered curiosity among observers of India-Sri Lanka relations because it will be after nearly 40 years that regular ferry services will be operated between Tamil Nadu and the Northern Province.

Speaking from Jaffna, Sritharan Thirunavukkarasu, president of the Social Democratic Party of Tamils, said he does not see any problem in the sector drawing adequate passengers.

“Historically, people had travelled on this route. Besides, given the proximity of Nagapattinam to places of religious importance such as Nagore, Velankanni and Chidambaram, people of different religions would like to use the service,” said Thirunavukkarasu.

Vehicles emitting black smoke in trouble

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Colombo (LNW): People can now report vehicles that release too much black smoke to the Vehicular Emission Test Trust Fund.

Public complaints can be lodged via a message with a clear photo of the polluting vehicle and its location to WhatsApp at 070 350 0525.

Anyone using a vehicle that emits too much black smoke will be given a period of one month to fix the problem, or otherwise, their vehicle’s licence may be blacklisted, the Fund said.

It added that complaints can also be lodged in any event in which the services of the emission and testing centres fail to perform their duties properly, by sending a WhatsApp message to the same number, or calling 011 266 9915.

The Fund has found that nearly 30 per cent of vehicles in Sri Lanka release harmful black smoke.

This smoke can cause diseases like cancer and breathing problems, according to health experts.

Island-wide initiative to conserve foreign exchange on grain imports – State Minister Kader Mastan

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State Minister of Rural Economy Mr. Kader Mastan has announced the initiation of a comprehensive program aimed at reducing the government’s expenditure on grain imports by providing seeds and market opportunities to rural cultivators across the country.

This program, initially launched in the Mannar district, is poised for nationwide expansion in the future. Minister of State Kader Mastan shared these insights during a press conference held at the Presidential Media Centre ywsterday (05), focusing on the theme ‘Collective Path to a Stable Country.

Minister of State Kader Mastan further elaborated:

Various initiatives have been undertaken, guided by President Ranil Wickremesinghe, to address the economic challenges facing the nation. These programs have contributed to the steady progress of the country, and owe the gratitude to the President for his leadership and vision. It is imperative to extend the full support to the projects that the President is spearheading.

In alignment with this commitment, the State Ministry is actively implementing a range of programs to bolster the rural economy, with a special focus on enhancing the livelihoods of rural communities. It has taken significant steps to provide essential seeds to rural cultivators and facilitate market access for their produce.

“For instance, we have already procured approximately 950 metric tons of green beans from the Mannar district alone through this initiative, contributing to substantial foreign exchange savings on grain imports. We have implemented numerous programs designed to promote agriculture and increase the participation of rural populations in the country’s economic development”.

“Our goal is to expand this program nationwide. Additionally, we are providing vital support for the establishment of goat farms, with the aim of transforming small-scale rural goat breeders into successful owners of large-scale goat farming enterprises within a span of 3-4 years”.

Moreover, through the ‘Hada Bima’ authority, it has facilitating the distribution of seedlings and chicks to rural residents engaged in agriculture and poultry management, respectively. The Ministry is also actively involved in the establishment of youth farming villages in various regions, fostering economic self-sufficiency at the village level. Efforts are underway to establish economic centres in different provinces across the island, with a focus on expediting the opening of completed centres.

President Wickremesinghe has also allocated funds for the renovation of lakes and canals in rural areas that support agricultural activities, demonstrating his unwavering commitment to safeguarding the interests of farmers and enhancing their livelihoods, even amid the economic challenges the nation faces.

Additionally, this year, the ‘National Milad Festival’ is being held in Mannar district, accompanied by various development projects that will benefit the entire community.

SL sees remarkable growth in foreign remittances this year

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Colombo (LNW): Sri Lanka has seen more foreign remittances this year, revealing a sum of US $3,863 million in the first eight months of 2023, reports claimed.

This is reportedly a greater value than the US $2,215 million received during the corresponding period of last year, revealed the Central Bank of Sri Lanka (CBSL).

In August 2023, foreign remittances amounted to US $499 million, and the value stood at US $325 million in August 2022.

These figures appear in the backdrop where many people are leaving Sri Lanka for foreign employment, and about 311,056 have left the country this year.

With increasing tourist arrivals, Sri Lanka sees 904,318 tourist visits from January to August this year, and this is reportedly greater than the 496,430 tourists arrived in the country in the corresponding period in 2022.

In August this year, tourists spent US$ 211 million in Sri Lanka, and their spending amounted to US $219 million in July and only US$ 68 million in August the year before, according to data.

From January to August this year, tourists spending amounted to US $1,304 million, a value much greater than the US $833 million reported during the corresponding year of 2022.

Most of the tourist earnings are from countries like India, the UK, China, Germany, and Russia.

SL’s brain drain hits ICT Sector’s workforce

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Colombo (LNW): The Information and Communication Technology (ICT) sector in Sri Lanka is grappling with a significant shortage of skilled professionals, many of whom have emigrated, a senior official disclosed with media.

The island nation’s strategic goal under the Digiecon-2030 plan is to enhance the digital economy, aiming for it to contribute a minimum of US $15 billion to the national economy by 2030.

This comprehensive strategy includes initiatives such as digital nomad visas, the introduction of e-payments across government entities, and streamlined approval processes.

As per the projections of Digiecon-2030, the country’s ICT workforce should number around 175,000 in the current year and increase to 300,000 by 2025.

“Presently, our workforce stands at just 75,000. While we’re progressing towards Digiecon-2030’s objectives, the continuous outflow of talent remains a pressing issue,” Prasad Samarawickrema, Project Director of Digiecon-2030, told EconomyNext.

The Digiecon-2030 strategy envisions propelling Sri Lanka’s economy into a comprehensive digital era by harnessing innovative, tech-driven solutions.

A large portion of ICT professionals depart the nation after only a year’s experience, predominantly migrating to European nations, Samarawickrama pointed out.

“We currently have a shortfall of 50,000 ICT professionals. To realise our goals, we’re in dire need of start-ups and technical experts,” he said.

Samarawickrema emphasised the necessity to overhaul the educational curriculum, integrating updated ICT subjects in schools and revamping vocational training programs to yield competent ICT professionals, stating “The academic curriculum might take up to seven years to modify, while vocational training could take over a year. By then, newer technologies could emerge, rendering the curriculum obsolete”.

He pressed on the need for a bespoke revision in the ICT-focused educational system, mentioning, “Many of the local ICT graduates don’t meet the industry’s employment standards.”

Following a severe economic downturn, which led to a declaration of bankruptcy and sovereign debt default last April, Sri Lanka witnessed a mass exodus of its ICT professionals.

President Ranil Wickremesinghe, who also oversees the Technology Ministry, has been ardently advocating for the digitisation of the economy, aiming to curb corruption and expedite economic revival.

However, there has been resistance to this digital transformation from many public sector workers in the past.

Ousting Naseer Ahamed from SLMC lawful, Supreme Court rules

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Colombo (LNW): The Supreme Court today ruled that the removal of Environment Minister Naseer Ahamed from the Sri Lanka Muslim Congress (SLMC) is lawful and valid.

This was when the case was taken up before the Supreme Court Bench comprised of Justices Preethi Padman Surasena and Mahinda Samayawardhena today (06).

Earlier in April 2022, the SLMC made the decision to oust Naseer Ahamed following his induction as the Minister of Environment in the preceding government.

Subsequent to Ahamed’s ministerial appointment, he voted in favour of the controversial 20th Amendment to the Constitution adapted by the Gotabaya Rajapaksa Administration in 2020 and voted in support of the 2022 Budget, violating the SLMC’s stances on such scenarios.

Having campaigned and achieved electoral victory in the Batticaloa District under the SLMC banner, Ahmed became a MP, and yet, following today’s ruling by the Supreme Court, the fate of his Parliamentary seat remains uncertain.

Heavy rains and floods lead to six deaths, force schools to close

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Colombo (LNW): Persistent heavy rainfall has resulted in flooding, mudslides, and fallen trees throughout Sri Lanka, leading to the deaths of at least six individuals, reports claimed.

As a result of the adverse weather, officials have shut down schools in affected regions. The country has been enduring the impact of intense monsoon showers for over a week, causing the inundation of homes, agricultural fields, and thoroughfares.

On a tragic note, a massive tree collapsed onto a bus in motion within Colombo, resulting in five fatalities and injuring an additional five people, reported Dr. Rukshan Bellana, the representative for the primary hospital in the capital.

In another incident, the state-affiliated Disaster Management Centre disclosed that a man lost his life in the Galle district – located approximately 130 kilometres to the south of Colombo – when a boulder struck his residence amidst a mudslide.

According to the centre, these calamities have wreaked havoc on hundreds of residences across 12 districts, affecting over 50,000 residents. Among them, about 1,473 families have been relocated to provisional housing for their safety.

Matara, a coastal district, has borne the brunt of the devastation, with extensive areas submerged for an extended period.

Consequently, educational institutions in Matara remained shut on Friday, taking into consideration the ongoing flooding and potential landslide risks.

Nobel Peace Prize awarded to Iran’s Narges Mohammadi 

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Iran’s Narges Mohammadi, a human rights advocate, has won the Nobel Peace Prize for 2023.

She was awarded the prestigious prize for her “fight against the oppression of women in Iran”.

Her struggle has come “at great personal cost”, the Nobel committee said.


Sky News

Directives from President Wickremesinghe for immediate flood relief in Matara

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President Ranil Wickremesinghe has issued direct instructions to government officials, including the Matara District Secretary, to assess the urgent needs of the flood-affected people in the Matara District, resulting from heavy rainfall. The President has emphasized the necessity of swiftly implementing relief measures.

The President’s directives also encompass the provision of vital facilities such as cooked meals and medication to those affected, along with the engagement of the armed forces to ensure the efficient delivery of aid.

Additionally, the President has alerted relevant agencies to formulate contingency plans for the safety and well-being of the populace in the event of worsening flood situations.

In the interim, President Ranil Wickremesinghe has issued directives to relevant government departments to remain vigilant regarding potential disaster situations that may arise in other districts due to adverse weather conditions.

A total of 9,448 individuals from 2,350 families across 16 Divisional Secretariat Divisions in the Matara district have been impacted by various calamities including floods, strong winds, landslides, heavy rains, rock falls and tree falls. Among these, 399 houses have sustained partial damage, with 37 other properties affected.

Community food processing centres have been established in Malambada, Akurassa, Kamburupitiya and Thihagoda to provide meals for those in need.

Currently, 6,967 families comprising 25,553 individuals are stranded due to the floods and the army is actively engaged in providing them with cooked food.

Simultaneously, the Sri Lankan Army has initiated a specialized relief program for the residents of the Malimbada Divisional Secretariat Division within the Matara District, which has been severely affected by the flooding.

Under the leadership of Major General Janaka Ranasinghe, Commander of the 61st Infantry Division, and Colonel Roshan Kannangara, Commander of the Matara Area, two army battalions have been actively engaged in relief efforts.

A total of 6 dinghies and 3 motor boats have been deployed to provide assistance to affected individuals, while special military vehicles are on standby for potential emergency rescue operations.

For reporting emergency situations and related information in the Matara district, individuals are urged to contact Major General Janaka Ranasinghe at 0766907042 and Colonel Roshan Kannangara at 0766907146.

Concurrently, a high-level discussion addressing the state of emergency in the Matara district and outlining forthcoming relief measures was convened yesterday (04) at the Matara District Secretariat following President Ranil Wickremesinghe’s directives. The meeting presided over by Minister of Power and Energy, Mr. Kanchana Wijesekera and included the participation of Southern Province Governor Willy Gamage, Member of Parliament Karuna Kodithuvakku, District Secretary Y. Wickramasiri, the Governor’s Secretary, Additional District Secretaries, all Divisional Secretaries of the Matara District and representatives from law enforcement, the armed forces and various government departments.

The discussion extensively covered immediate relief measures for affected individuals and strategies for the post-flood recovery process.

It was agreed that daily disaster management meetings would be held, uniting Divisional Secretariats and Pradeshiya Sabhas to coordinate efforts. Additionally, decisions taken during these meetings will be conveyed to the District Disaster Committees through Zoom technology on a daily basis.