The Government’s corporate tax hike is to knock out thrice battered Sri Lanka tea industry by Covid-19, fertilizer ban and economic crisis is set to recover this year with a production target of 300 million kilograms and earn US$ 1.3 million from tea exports this year, industry sources said.
Sri Lanka expects tea production to recover in 2023 to 300 million kilograms after output fell to 260 million kilograms in 2022 with former President Gotabaya Rajapaksa’s utterly foolish overnight decision of banning fertilizer and agro-chemicals.
But this ambitious target towards the recovery of the industry will definitely suffer another set back for the fourth time in two years owing to the government’s action of doubling the corporate income tax rate impacting net foreign exchange earning of tea industry mainly in three ways
According to tea industry experts the increase in corporate income tax could affect the overall efficiency in the tea industry and the burden may sooner or later be felt through the entire supply chain including the tea smallholder growers.
Some tea export companies may even move to other countries like the Jebel Ali Free Zone in Dubai due to high taxes, purely to protect their market shares which have been gained through several years of hard work.
Hence the Tea Exporters Association ( TEA ) earnestly request the government to maintain the concessionary corporate income tax rate of 14 % for the tea export sector for its long term sustainability, which will ultimately bring in much higher growth dividends for the economy
Sri Lanka’s tea exports have dropped to a 25-years low in 2022 hit by a fertilizer shortage due to an ill-advised agrochemical ban, an industry report said.
Sri Lanka exported 250.19 million kgs of tea in 2022, 13 percent down compared to 2021 and it is the lowest since 1997. All categories of tea have recorded a drop except the instant tea.
“In a very challenging year of poor supply, turbulent domestic working environment, compounded by multiple international challenges, Sri Lanka exported 250.19 million kg 148 countries,” tea broker firm Asia Siyaka said in a report.
“Despite reasonable weather conditions throughout 2022, Sri Lanka tea production declined sharply and is likely to end the year at around 252 million kgs compared with 299 million kgs in 2021.”
The exports generated $1.27 billion in earnings, a decrease of 4.5 percent compared to 2021, the data showed.
In rupee terms, Sri Lanka has earned Rs 411.09 billion, an increase of 56 percent in comparison to Rs 263.35 billion in 2021, mainly due to sharp depreciation of the rupee currency.
Iraq, Russia and UAE have remained the top markets for Ceylon tea. The Tea Export sector annually bringing revenue of about $1.3 billion is concerned about the proposed corporate income tax of 30% by the government on the export sector as it could seriously hinder the industry’s efforts for revival.
Thrice hit SL Tea industry faces another deadly blow from corporate tax hike
Norochcholai resumes operations, Kelanitissa stalled
The operations at the Kelanitissa Combined Cycle Power Plant have been stalled since this (22) morning incurring a drop of 165 megawatts from the national grid, hours after the operations at the Norochcholai Coal Power Plant, which had been stalled due to maintenance, were restored.
The power plant has stalled its operations due to the absence of sufficient stocks of naphtha owned by the Ceylon Electricity Board (CEB).
Meanwhile, the Norochcholai Power Plant is said to be fully operational.
MIAP
French court convicts 14 Sri Lankans of migrant smuggling across Europe
A court in northern France has sentenced 14 Sri Lankan nationals to prison for operating a migrant smuggling ring across Europe, as authorities across the continent try to crack down on the lucrative criminal networks.
The main suspect, accused of overseeing the operation from a grocery store in the village of Serifontaine, was handed a four-year prison term, with one year suspended.
Investigators determined that he set the prices and routes for moving migrants from Sri Lanka and Bangladesh across the continent from Ukraine, with the help of bribes to officials in Eastern Europe.
Another suspect, who is based in Britain but fighting extradition requests, was given a five-year sentence by the court in Beauvais, while the others were given lesser prison terms.
Smuggling gangs have flourished as increasing numbers of migrants have headed for Europe in recent years, with many hoping to cross the English Channel to Britain.
More than 45,000 migrants crossed the Channel from mainland Europe in 2022, surpassing the previous year’s record by more than 17,000, according to British government figures.
CoPF praises Port City Commission for immediate implementation of recommendations
The Committee on Public Funds (CoPF) on January 19 has praised the Colombo Port City Commission for taking immediate actions to implement the recommendations forwarded by the CoPF on January 05.
The CoPF’s recommendation of adopting online methods for the Port City Commission and submitting audited accounts for the year 2021 has immediately been responded with, hence Committee Chief MP (Dr.) Harsha De Silva’s appreciation of the actions.
Attending the CoPF session, officers of the Port City Commission noted that it was established under a completely legitimate purview of the government in accordance with the Port City Commission Act.
The Commission responding to a query on its ability of corroborating the validity of the information provided in the applications related to the licences emphasised that the responsibility of the information detailed in each application is referred to the applicant themselves, adding that a register of all companies in the Port City Premises are being maintained electronically enabling the general public to access these information.
Queried about the privileges of applicants who have the freedom to choose to do business outside the Port City in terms of tax policies, the Commission responded saying that those institutions have been given the authority for policy formulation pertaining to pay structures and human resources.
In response, CoPF Chief Dr. Silva stressed that the process should be subject to strong surveillance in the probability of the occurrence of irregularities. In addition, the companies are, if approved by the subject Minister, eligible to to establish a business outside the Port City on an interim basis for not more than five years.
Elaborating on surcharges and penalty charges, the Commission went on that the parameters of penalties of the Port City Commission are being formulated together with the Attorney General’s Office and other relevant regulators. The CoPF Chief argued that the Port City Economic Commission cannot serve the purpose of multiple regulators in controlling the Colombo Port City, and instructed the Commission to work closely with the Ministry of Finance, which at the present is already working as per the instructions of the CoPF to establish a body for Casino regulation by the end of 2023.
Taking the matter of resolving conflicts into account, it was revealed that the institution within the Port City, as per the Port City Commission Act, offers provisions to solve only conflicts within the Port City. However, all judicial proceedings are being carried out on a priority basis at the Magistrates’ and Civil Courts within Sri Lanka’s borders, and the Attorney General’s Office confirmed that these matters will be reviewed soon.
Conclusively, all gazettes provided for review have been approved by the CoPF under conditions, following the Port City Economic Commission’s assurance that the licence renewal process will be brought under more clarity, and regular meetings will be carried out to ensure proper submission of audit reports and avoidance of delays in other legal affairs.
State Ministers Suren Raghavan, Anupa Paskuel, MPs Chandima Weerakkody, Mayantha Dissanayake, Ranjith Bandara, Nalaka Godahewa, Premnath C. Dolawatta and Madhura Withanage, and officers of the Port City Commission and the Attorney General’s Office also attended the event.
MIAP
SLPP Mayor in Kurunegala ousted!
Mayor in Kurunegala Thushara Sanjeewa has reportedly been dismissed from his position, through an extraordinary gazette issued by the North-Western Province Governor with effect from 31.12.2022.
The move comes in due to Sanjeewa’s failure of passing the Budget of the Kurunegala Urban Council.
Sanjeewa is a close associate and a disciple of former Minister Johnston Fernando.
MIAP
UAE HR Minister assures Minister Nanayakkara his country will take stern action against those facilitating illegal immigration to UAE
The UAE Human Resources Minister Dr. Abdulrahman Abdulmannan Al Awar assured Labour and Foreign Employment Minister Manusha Nanayakkara that his country will take stern action against those who bring foreign workers to the country through illegal methods.
Minister Nanayakkara is on an official visit to UAE and explained to the UAE minister about difficulties faced by Sri Lankans who come in search of jobs to UAE on visit Visas as a result of various scams by individuals and organized groups. He also explained that efforts are taken to make the public aware of the perils of seeking foreign employment opportunities through a visit visa.
The UAE minister responded positively to a request by minister Nanayakkara to provide more job opportunities in UAE for skilled workers from Sri Lanka.
The joint technical committee that was set up in 2021 between the two countries will continue to discuss technical details on how to prevent human trafficking through visit visas to UAE. Also, a qualification equalisation program will be implemented by mapping the qualification framework of the two countries that will recognize the qualifications of Sri Lankan migrant workers.
Minister Nanayakkara explained that 35,572 Sri Lankan workers obtained employment opportunities through the Sri Lanka Bureau of Foreign Employment last year which accounts for 11.4% of the total departures in Sri Lanka. This is a 27 percent increase in 2022 compared to 2021.
The UAE Human Resources Minister explained that the newly implemented mandatory unemployment insurance applies to migrant workers as well. This will provide an amount equal to 60 percent of the salary of a migrant worker for three months in the event of job loss. He also told Minister Nanayakkara that a center that operates in 20 languages has been set up by UAE to address migrant worker grievances. Labor recruitment fees were also discussed.
Minister Nanayakkara while explaining the recent economic crisis in Sri Lanka thanked the UAE minister for the help given by his country and was hopeful that UAE would continue to extend its support, especially in the areas of foreign employment, trade, and investment.
Assistant Secretary for Labour Affairs Ayesha Belharfia, Assistant Secretaries Abdulla Alnuaimi, Mohsin Muhsih, Assistant Director for International Bilateral Affairs Noora Alsuwaidi, International Affairs Expert Mohamed Alhammadi, Executive Officer Moza Alshamsi, Sri Lankan Ambassador-designate to UAE Udaya Indraratne and Consul General of Dubai Nalinda Wijeratne were among the participants.
Sri Lanka Original Narrative Summary: 22/01
- World Bank projects Sri Lanka to have the lowest growth (-4.2%) among 148 countries in 2023: in January 2022, Sri Lanka’s 2022 growth was projected at +4% while the projection for 2023 was +4.5%: however, all estimates reversed dramatically after the debt default announcement of 12th April 2022, and economy commenced contraction.
- Central Bank to issue its largest-ever stock of Treasury Bills in its 100-year history next week, with a staggering issue of Rs.120 bn: previous highest T-Bill issue was Rs.98 bn issued on 5 occasions – 8Jun’22, 15Jun’22, 14Dec’22, 28Dec’22 & 4Jan’23: T-Bill investments generally considered “risk-free” as the CB is mandated to “print” money and repay, if the Govt is unable to pay.
- World Bank says Sri Lanka’s food inflation in 2022 of 64% was the 6th highest in the world: the countries ahead were Zimbabwe (376%), Lebanon (171%), Venezuela (158%), Argentina (94%) and Turkey (77%).
- Professionals including medical practitioners stage protest outside Finance Ministry and demand fair taxes: voice opposition against the increasing cost of living: Police, Riot Police and Navy force the protestors to spread out.
- Public Utilities Commission agrees to the Cabinet Decision on a retrospective electricity tariff hike with immediate effect, after a meeting with President Ranil Wickremesinghe.
- National People’s Power Leader Anura Kumara Dissanayake proposes 75% cut to the salaries of Local Govt councillors if the Govt claims it lacks the funds to hold Local Govt elections.
- Fitch Ratings downgrades National Long-Term Ratings of 5 Finance and Leasing companies – People’s Leasing, Central Finance, CBC Finance, HNB Finance and Siyapatha Finance: downgrades follow similar recent action on 10 banks and several insurance companies, consequent to the debt default.
- Govt stipulates new Maximum Retail Price for eggs for the 2nd time: white egg – Rs.44, brown egg – Rs.46.
- Senior Govt source reveals Finance Ministry is struggling to “find” Rs.55 bn to pay for coal shipments: Rs.20 bn “found” and negotiations said to be ongoing to “find” balance: CEB Engineers warn of dire consequences if money is not “found” and coal is not imported by the month’s end.
- Industry report reveals Tea exports dropped to a 25-year low in 2022, hit by the fertilizer shortage due to agrochemical ban: only 250 mn kgs of tea was exported in 2022 – 13% down, compared to 2021 and lowest since 1997.
Fairly heavy showers above 75mm, showers or thundershowers expected at some places
Cloudy skies are expected over most parts of the island with cold weather, and showers or thundershowers will occur at times in Uva and Eastern provinces and in Hambantota and Polonnaruwa districts, announced the Department of Meteorology today (22).
Fairly heavy showers above 75mm are likely at some places, and showers or thundershowers may occur at several places elsewhere during the afternoon or night.
General public is kindly requested to take adequate precautions to minimise damages caused by temporary localised strong winds and lightning during thundershowers.
Marine Weather:
| Condition of Rain: |
| Showers will occur at times in the sea areas off the coast extending from Hambanthota to Kankasanthurai via Batticaloa, Trincomalee and Mullaitivu. |
| Winds: |
| Winds will be north-easterly and wind speed will be (25-35) kmph. Wind speed may increase up to (40-50) kmph at times over the sea areas off the cost extending from Colombo to Galle via Puttalam, Kankasanthurai, Trincomalee, Batticaloa and Hambantota. |
| State of Sea: |
| Sea areas off the coast extending from Colombo to Galle via Puttalam, Kankasanthurai, Trincomalee, Batticaloa and Hambantota, will be rough at times. The other sea areas around the island may be slight to moderate. Temporarily strong gusty winds and very rough seas can be expected during thundershowers. |
MIAP
Bus driver of Nanuoya accident killing seven arrested
The driver of the of the bus which collided with a three wheeler and a van in Nuwara Eliya – Nanuoya causing a fatal accident has been arrested by the Police yesterday (21) eve, reports claim.
The accident occurred on the night of two days ago (20) killed seven persons including six persons inside the van including three children and the three wheeler driver.
Initial probe into the accident uncovered that the negligent driving of the bus driver where he was revealed to have driven too fast has caused the collision, hence the arrest.
MIAP
President instructs the implementation of a youth-led development plan for SL
In conjunction with the 75th Independence Day, under the theme, ‘National Youth Platform’, President Ranil Wickremesinghe has instructed to implement a youth-led development project covering the entire island to make Sri Lanka a developed country by the 100th Independence Celebration (2048) through youth ideas, skills and interventions.
A discussion regarding this program was held yesterday (19) at the Presidential Secretariat under the patronage of the President. During this discussion, the plans related to the development of the major cities in each district as tourist cities formulated by the lecturers and students of all the universities were presented to the President.
Accordingly, the Jaffna and Vavuniya University, focusing on the Jaffna district and the Kelaniya University and Rajarata University presented tourism plans related to the Anuradhapura district.
The Ruhuna University, Sabaragamuwa University and Sir John Kotelawala Defence University jointly submitted plans for the Galle districts and the Colombo University, Sri Jayawardenepura University, University of Fine Arts and the Moratuwa University jointly submitted their plans for the Colombo district.
Peradeniya, Wayamba and Uva Wellassa Universities jointly presented the plans related to the Kandy district while the Eastern and South Eastern Universities presented the plans for the Batticaloa district.
Expressing his appreciation for all the plans that were submitted, the President said that private-sector financial assistance could also be sought to support this program.
Pointing out that it is a very good trend for the university community to contribute to the development of the country, Mr Ranil Wickremesinghe appreciated the university community’s involvement in these projects and commended their contribution.
Senior Advisor to the President on National Security and Chief of Staff to the President Sagala Ratnayake, Secretary to the President Saman Ekanayake, Chairman of the University Grants Commission Dr Sampath Amaratunga, Secretary to the Ministry of Finance Mahinda Siriwardena, University Vice Chancellors and officers of line institutions joined this discussion through online technology.
PMD