President Ranil Wickremesinghe, in an interview with Pasini Withanage on The Leader YouTube channel on Thursday (13), emphasized the importance of King Charles III attending the United Nations Climate Change Conference (COP27) scheduled to be held in Egypt from 6 – 18 November 2022.

The President made this observation in response to a statement made by Buckingham Palace on October 02 which stated that a decision had been made for King Charles III not to attend COP27.

The President of last year’s summit and member of Liz Truss’s Cabinet Alok Sharma however had stated that King Charles III should attend the upcoming climate change conference. Sharma was responding to a report which claimed British Prime Minister Liz Truss had ordered the king not to attend the conference.

According to British news reports, the King- then the Prince of Wales had indicated he would attend the annual conference.

King Charles III has been a staunch climate action advocate with a long history of campaigning to reduce the effects of climate change and made a speech during the opening of last year’s summit.

President Wickremesinghe, who recently appointed former Norwegian Minister of Environment Erik Solheim as his international advisor on climate, is expected to attend COP27 in Egypt next month.

The full text of the interview is as follows;

Q. Why is Sri Lanka placing so much importance and emphasis on climate change, especially during the economic crisis?

A. Well, if you are looking at the economic crisis, we have to emphasize climate change because today the economy and climate change are interlinked. We have to recover from this position. There must be economic development in the country. We have to go ahead. Then, our economy now must be on the lines of a green economy. That’s what everyone else is doing in the world. We can’t be outside that. Secondly, tremendous potential Sri Lanka has as a green economy. We’re getting into renewable energy. There are many other fields in which Sri Lanka can really benefit and we should go ahead.

Q. What are some of the initiatives that Sri Lanka has put in place, or is planning to put in place to address climate change?

A. Actually, we haven’t done much after COP26 due to the political instability in Sri Lanka, but we do have a plan. Our framework will take into account the 2015 Paris Climate Agreement we signed, the decisions taken at COP26, and the Commonwealth Heads of Government resolution on climate change. We are also looking at the blue economy. So within this framework, we’ll be working out our initiatives, and the potential we have. The steps we had to take. We even had to look at the water at some stage, degraded soils and reforestation. But in addition to that, I feel there has to be capacity building not only for Sri Lanka but for our whole region. We are also proposing 1s a climate change university which will be devoted to capacity building among the officials and the activists involved in climate change.

Q. You mentioned the COP summit. It has been announced that you will be attending the COP27 in Egypt next month. What is the government hoping to achieve by attending the summit?

A. No, we want to play our role there because we are very concerned as an Indian Ocean island nation, about the impact it can have on us. And we should also work together with India, especially in places like Tamil Nadu. A lot is being done on climate change. I also want to get support for the climate change university which we have been advocating. So we are going ahead and I’ve asked the former President of Maldives, Mr. Mohamed Nasheed, to act as my special envoy on climate change. He has been visiting several countries and Mr Eric Solheim came as an advisor, on both our legislation as well as the climate change university.

Q. The climate summit has been running for 27 editions now this year. Do you think the summit had been successful or do you think there’s space for improvement?

A. Well, 2015 was a really important one, when it came to the climate change agreement, and certainly 26 is very important. We have to follow up on COP26. Some of these countries have fallen behind or they’ve sort of retreated from the position they have taken. This is why COP27 is important. The President of Egypt had invited King Charles III to come and address COP 27. I also think it’s very important. Unfortunately, there seem to be some issues in the UK about him attending COP27. I can’t talk of the UK, but talking as a member of the Commonwealth, King Charles is the head of the Commonwealth and last February at the CHOGM, we passed a resolution on climate change. Therefore, he should be here. I think the UK government should reconsider it and enable him to be in Egypt for COP27 because he has an important role to play.

THE LEADER

Damien Fernando, MBA (Sri.J), FCMA (UK) 

The highest rate for employee income is now increased from 18% to 36%. It appears that the revenue planners of this country do not like to learn from developed countries how to recover the cost of government services to the people. They would instead stick to the traditional methods of taxing income earners. There are other ways of recovering the costs of the government and services. The only success story in this in Sri Lanka is the passport office. Changing from when people had to wait for several weeks to obtain a passport for a small fee, they successfully introduced one day service for payment of a higher fee. If I am not mistaken, this system recovers the cost of the passport operation and possibly makes a surplus for the department. Apart from this, the treasury or the revenue planners have been incapable of thinking outside the box, increasing the taxes on the private sector employees and exporters.

While none of the government sector employees pay any tax on their employment income, private sector employees (who do not qualify for any pension on retirement) have to pay taxes on their employment income. The unfair part of this is that private sector employees are made to subsidize the services the government provides for everyone.

As the current tax-free threshold is Rs. 100,000/= a month, why cannot the income taxes apply to government sector employees as well? A salary of Rs. 100,000/= is way more than an average govt sector employee gets. There would not be resistance from anyone as only the people with higher incomes get taxed as their counterparts in the private sector. A private sector employee making over Rs. 100,000/- a month must pay the same prices for goods and services as a government sector employee would. 

Most governments have three ways of recovering the expenditure. One is direct taxes such as VAT and income taxes. The second is indirect taxes, such as taxes on food and other imported items. The third, user–pay, is rarely used in Sri Lanka except for passports and motorway use. Unlike other taxes, the user-pay collection is not hated by the payers as they get a direct benefit for what they pay. Also, the user-pay method is a fair system of recovery of costs, unlike making few people subsidize the services mainly provided to others. 

Following are a few examples where the system can be changed to shift to a user-pay method and reduce dependency on the higher income tax from the exporters and the private sector employees.

1. One of the most significant expenditures of the government is education and higher education. There are approximately 4.2 million schoolchildren between grades 1-12. It is fair to assume that at least 15% of these students come from families with a monthly income of over Rs. 100,000 or assets over Rs. 25 million. If such children are made to pay Rs. 5,000 a month for education, the total revenue of the education department would be Rs. 37.8 billion a year.  Parallel to this, the govt could also impose a fee of Rs. 5,000 a seat in every private school.

2. Except for the few motorways, all other roads do not recover any cost from the users for the usage. A per kilometer fee (say 1/3 of the per/km fee for motorways) for the use of the other major roads, the government could at least recover a part of the maintenance and renovation of roads. Rather than having staffed booths like on our highways, there are electronic user fee-collecting systems. An exemption could be given to passenger buses, motorcycles, three-wheelers, and Lorries. 

3. The govt. also spends a considerable amount of money on the work done by the local government institutions. However, the rates charged by the local government institutions are negligible compared to the costs—an apartment or a house worth Rs. Fifty million has to pay only Rs. 2,500 a year as rates. The government could easily charge 0.5% of the property’s value, which would be Rs. 250,000/= a year or around Rs. 20,000/= a month. That is 100 times the current rates. The government could allow the local bodies to retain 30% of the amount they collect as rates and take the balance to cover the infrastructure cost they must maintain. Also, this will eliminate the costs the central government is paying to local governments.  With the government’s infrastructure costs, the property value goes up substantially. Hence it is fair to recover 0.5% a year on the property value as the owners could enjoy 99.5% of the gain.  

4. The present revenue license fee charged for motor vehicles is also way too small. For example, a Rs. 20 million worth of Land Cruiser Prado has to pay a license fee of Rs. 4,000/=. This is compared to the famous SRI tax introduced by Dr. N.M Perera in the ’70s, where a car with a registration number starting from 6 SRI had to pay Rs. 600/= a year. While the owner of a Prado would pay only Rs. 4000/= for the revenue license, he would pay Rs. 300,000/= to insure the same car for one year. The RMV should charge at least 0.2% for the revenue license, which will be Rs. 40,000/- a year. The Automobile Association could easily provide the average valuation of each YOM and model of a vehicle to RMV. Such a fee will increase the revenue of RMV by ten times.  

5. The govt. can implement a student loan scheme for higher education by the govt. Universities. The loan is to be paid monthly for ten years after completion of the degree without interest. This will recover a substantial portion of the costs govt. incurs on universities. Subsequently, the student loan scheme could be extended to include private universities.  To estimate the recovery, if one assumes 50,000 students enter state universities a year, and the fee for higher education degrees is Rs. 10,000/- a month, then the income for a year will be in the range of Rs. 24 billion. There are several advantages of this method.  One is that the students will attempt to complete their degree on time rather than staying in the university without completing the degree. This is as every month his cost will increase by Rs. 10,000/=. Other is as the university gets paid Rs. 10,000/= a month for every student, they admit they will try to increase the capacities and the intake to increase their revenue. 

6. Even for healthcare, a fee of Rs. 100/= for a consultation and, say, Rs. 500/- a day for hospitalization and Rs. 5000/= for surgery is not unfair for members of a family that has an income over Rs. 100,000/= a month or Rs. 25 million in assets.

7. Although not an example of a possible user-pay service, the cost of a poverty alleviation scheme (samurdhi) could also be modified to be less costly to the government and more effective for recipients. The poverty alleviation systems have failed to pull a significant portion of the poor out of their situation. If the government coordinates a scheme in that people and companies volunteer to look after a needy family by providing Rs. 10,000 a month, it will be way better than Rs. 3,000 or so the samurdhi pay. The most significant advantage is that the sponsor could provide children with used or new clothes, books, and education and career guidance. Some would help their recipient families with assistance to home renovation, household goods, food, etc. While many well-to-do individuals and families will volunteer to sponsor another (poor) family, large state-sector and private-sector banks and other organizations will volunteer to support hundreds of families. The most crucial part of such a scheme is the guidance and further help the low-income families would get so that many families would come out of poverty after a few years.

There could be many government services that are now provided free of charge or for a small fee. Subsidizing for low-income earning families is always justified in any society. However, providing free or subsidized services to those who can afford to pay and making the private sector employees pay higher taxes on their income is grossly unfair.

The government should introduce a free services card for families with income of less than Rs. 100,000 a month or Rs. 25 million in assets so they can be provided with free education and healthcare. This should be done based on an affidavit signed by the head of the household. If an applicant gives a false affidavit on their income and assets, they could be prosecuted, and a fine of several folds of the cost of free services provided could be recovered. Similar systems are implemented in developed countries with reasonable success.  

The Court of Appeal has issued a warrant to arrest the Minister of State Sanath Nishantha and bring him to court.

This is due to the fact that a notice was issued to appear before the Court of Appeal today (13) in relation to the complaint filed against him regarding contempt of court, but he did not appear before the court when the case was called this morning.

Accordingly, this warrant was issued to the IGP by the Court of Appeal Judges Nishanka Bandula Karunaratne and R Gurusinghe.

However, it was reported that after some delay, Sanath Nishantha had arrived at court.

The subjects and functions of the two Ministers of State under the Ministry of Industry have been published through a special gazette.

Industry Minister Ramesh Pathirana has issued this gazette announcement.

Accordingly, the functions and government institutions allocated to Chamara Sampath Dasanayake, Minister of State for Primary Industries and Prasanna Ranaweera, Minister of State for Small and Medium Enterprise Development are as follows.

1. President Ranil Wickremesinghe appoints former Norwegian Minister and Peace Accord architect Erik Solheim as International Climate Advisor: also appoints former Maldivian President Mohamed Nasheed as another advisor.
2. Government receives 2.3 million applications from families for “Leave No One Behind” welfare benefits program: deadline for seeking such welfare is 15th October.
3. JAAF Secretary General Yohan Lawrence says the apparel industry is deeply concerned that corporate tax has doubled for exporters: warns additional tax will make industry uncompetitive: also says the industry is already experiencing a 25% decline in orders for 4Q22 due to softening of global markets.
4. Majority of SLPP MPs are said to be of the view that a new Constitution should be adopted instead of making amendments to the existing Constitution: suggest consideration of new draft recommended by the Romesh de Silva Committee.
5. Industries Minister Ramesh Pathirana’s proposal to allocate 16 land plots to 16 investors on a 35-year lease basis, approved by the Cabinet.
6. Australian Federal Police say two Australian men have been charged with bribing Sri Lankan officials with more than A$304,000 (USD190,000) between 2009 and 2016 to secure infrastructure contracts worth millions of dollars.
7. Election Commission Chairman Nimal Punchihewa condemns Government’s “attempt” to postpone the Provincial Council elections: says the EC would soon take a decision to conduct Poll before March next year.
8. President Ranil Wickremesinghe equates
   those who take their children to “protest demonstrations” to LTTE Leader
   Prabhakaran’s use of children as “human shields”: says measures will be taken to stop the practice.
9. State Finance Minister and Kegalle SLFP MP Ranjith Siyambalapitiya admits the Paddy Marketing Board hasn’t
   purchased any paddy: says the reason is “lack of
   funds”.
10. SJB MP Kabir Hashim warns proposed new taxes might have devastating consequences on Sri Lankan industries: laments small and medium enterprises will have to pay between 14% to 30% of their income as taxes: also says export sector earlier paid 14% but now it has to pay 30%.

Wasantha Samarasinghe, the former Member of Parliament of the Janata Vimukthi Peramuna, emphasizes that the new Tax Act, which subjects the employees of government, semi-government and private institutions to taxes, should be changed immediately.

He said that according to this tax system, the company employees will have to hand over their salary to the government again.

He said that according to the economic crisis in the country, what should be done at the moment is not to collect taxes from the people, but to give relief to the people.

Wasantha Samarasinghe said this while addressing a press conference held yesterday (12).

President Ranil Wickramasinghe pointed out that taking children as shields to protests is a serious offense according to the country’s law and instructed the Sri Lanka Police to take immediate measures to prevent the taking of children to protests.

President Ranil Wickramasinghe gave these instructions while joining the special discussion held at the President’s Office yesterday (12) morning on the protection of children’s rights and the protection of children’s human rights.

Steps were also taken to assign the responsibilities of child protection to the Sri Lanka Police and child rights protection institutions.

President Ranil Wickramasinghe emphasized the need for an Act to protect children’s rights against the use of children for sexual activities and to protect the human rights of children.

The President drew attention to the detention of the children who were among the people who were arrested for illegally migrating to India, separated from their parents and informed that it should be rectified immediately and arrangements should be made to place the children with their parents. The President also paid special attention to the educational activities of the children in orphanages and protecting their rights and asked the officials to identify the children with special needs in the orphanages and submit a report on it.

The President pointed out the need to provide formal training to the guardians who are in charge of children’s homes and said that by doing so, the problematic situations faced by the children can be avoided.

Minister of State for Women and Children’s Affairs Geeta Kumarasinghe and President’s Secretary Saman Ekanayake and government officials of line institutions were present in this discussion.