Sri Lankan Ambassador in India Milinda Moragoda described India as a “logical partner” for Sri Lanka’s efforts to overcome the country’s economic crisis, including in efforts to acquire bridging finance and investments in sectors such as tourism.
Moragoda, who took the unusual step of issuing a strategy paper for reshaping bilateral relations before coming to New Delhi, said there is also fresh momentum on connectivity projects and the two countries are discussing the possibility of building an energy pipeline between the Trincomalee oil farm and the Indian side.
Sri Lanka will soon operationalize its consulate general in Kolkata and plans to appoint honorary consuls in Gujarat and Odisha as part of measures to increase the country’s footprint in Indian states, he said. There are also plans to compile a directory in Sinhala of all Buddhist sites in India to encourage more visits from the Sri Lankan side, he said.
India has really supported the isalnd nation at every turn in the past eight or nine months. If not for India, the country would have had a serious problem because when it came to fuel and food and when it also came to foreign exchange, India backed us up. So that is something as a country, we appreciate and we are grateful for,” he said.
Since the beginning of the year, India extended aid worth $3.8 billion, including lines of credit, a currency swap and deferring of loan repayments, to Sri Lanka.
Tough times are not over for Sri Lanka as it has to contend with both structural issues such as reforms of state-run enterprises and the power sector, and the restructuring of bilateral and multilateral debt.
Sri Lankan Ambassador in India Milinda Moragoda says “Unless these things are done, Sri Lanka can’t move forward. Ultimately we have to look at efficiency and at becoming an export economy and fitting somehow into global supply chains,” he said.
The administration of the new President, Ranil Wickremesinghe, is now focussing on the implementation of India-backed projects such as the Trincomalee oil farm and a national ID card scheme.
India to build an energy pipeline from Trincomalee oil farm to Indian side
SL government revises revenue to Rs 2 trillion from Rs.2.2trillion
Interim Budget 2022 has revised estimates of the Gotabaya Rajapaksa regime’s budget for this year forecasting the revenue drop to to Rs. 2 trillion from Rs. 2.2 trillion.
Of that, tax revenue is Rs. 1.85 trillion, down from Rs. 1.98 trillion. Income tax is estimated to be Rs. 558 billion, higher from Rs. 496 billion from original estimate.
Taxes on Goods and Services to be lower at Rs.972 billion despite the increase in VAT from Rs. 1 trillion previously. Non-tax revenue revised upwards to Rs. 232 billion from Rs. 226 billion.
The Government announced the Value Added tax (VAT) will be increased from 12% to 15% from Thursday but lowered its overall revenue estimate for 2022.
The increase in the VAT was the only major revenue measure, whereas prior to the interim Budget presentation the private sector was worried by higher or new taxation.
President Ranil Wickremasinghe delivering his budgeT speech in parliament said a number of tax reforms pertaining to Income Tax, Value Added Tax (VAT), Telecommunication Levy and Betting and Gaming Levy have already been approved to be implemented.
Some of these tax proposals have already been implemented.He also said most revenue proposals introduced in May 2022 will be effective from 1 October 2022.
“The implementation of these proposals will help increase the revenue. It will gradually reduce the quantum of monetary financing for Government expenditure,” Wickremesinghe said.
The President also announced that the 2023 Budget will present new revenue enhancing proposals.
In terms of tax administration, Wickremesinghe said efforts to increase the revenue, tax administration must play a pivotal role in enhancing the tax collection efficiency, strengthening tax compliance and preventing tax avoidance.
In addition to the already existing requirements, the President proposed to introduce compulsory tax registration for all residents who are above 18 years of age without considering their annual income and tax-free thresholds.
He also said the Government is committed to implement the recommendations in the Final Report of the “Presidential Commission of Inquiry into Sri Lanka Customs”. This will strengthen corporate, administrative, and operational processes of Sri Lanka Customs to discharge its responsibilities effectively and efficiently.
President also said measures will be taken to enhance non-tax revenue, including royalties received for Government assets.
He proposed to take actions to attract foreign investors and/or technology holders to establish joint ventures with Sri Lankan partners for industrial investments with advanced technologies to ensure better utilization of our mineral resources and increase value addition without jeopardizing the interests of the national economy and the sustainable use of resources.
The President said the online revenue collection program will be implemented in all local Government authorities before the end of 2022.
Basil’s travel ban temporarily lifted
The Supreme Court today granted permission to former Finance Minister Basil Rajapaksa to go abroad. This permission is valid till January 15 next year.
Several petitions have been filed before the Supreme Court asking for an order to be issued to the investigating agencies to investigate the people responsible for the current economic crisis. Former Prime Minister Mahinda Rajapaksa, Basil Rajapaksa and others have been named as respondents in the petitions.
The Supreme Court, which considered these petitions, had issued a foreign travel ban to the respondents of the petitions.
The lawyers representing Basil Rajapaksa asked the court today that their client wants to leave for America for medical treatment and other personal reasons. After considering the request, the foreign travel ban imposed on Basil Rajapaksa was temporarily lifted.
These petitions were considered before a five-member Supreme Court bench headed by Chief Justice Jayantha Jayasuriya.
Suren Batagoda to be apppointed as the Secretary of MOF?
Sources say that Dr. Suren Batagoda, a former secretary of the Ministry of Energy, will probably be appointed as the Secretary of the Ministry of Finance.
Sources said that if not, he may be appointed as the Governor of the Central Bank of Sri Lanka.
Suren Batagoda has previously worked as an additional secretary in the Ministry of Finance and is an experienced officer.
Batagoda who is also a lawyer, is a graduate of the famous Harvard University in America.
World Food Programme Regional Director for Asia and the Pacific calls on Foreign Minister Ali Sabry
World Food Programme (WFP) Regional Director for Asia and the Pacific John Aylieff, currently on a visit to Sri Lanka, paid a courtesy call on the Minister of Foreign Affairs, Ali Sabry on 01 September, 2022.
The Foreign Minister appreciated the support extended by WFP to Sri Lanka over the past decades in many areas including the national health system by supporting national nutrition programmes, the National School Meal Programme, in strengthening food systems to ensure access and availability of food and in developing shock-responsive safety net programmes particularly with the Department of Samurdhi. He apprised the Regional Director of the efforts taken by the Government of Sri Lanka in dialogue with all stakeholders including domestic and international partners, to emerge from the challenges facing the country.
The Regional Director briefed the Foreign Minister on the progress of the ongoing WFP programmes in the country, particularly the social safety net programmes and added that the WFP will continue to support and cooperate closely with the Government of Sri Lanka during this challenging time.
Ministry of Foreign Affairs
Colombo
02 September, 2022
Ali Sabry comes forward for Nandalal
Minister of Foreign Affairs Ali Sabry says that the decision to suspend the payment of interest and installments for loans taken from foreign countries was made after a long investigation with the intervention of the officials of the Central Bank, the officials of the Ministry of Finance, the heads of the government and all the responsible people.
The Minister points out that the decision was only announced to the country by the Governor of the Central Bank, and therefore it is absolutely unacceptable to accuse the Governor of the Central Bank Ajith Nandalal regarding the suspension of loan payments.
Ali Sabry said this while joining the budget debate, clarifying the comments made by the members of the opposition parties during the budget debate yesterday regarding the Governor of the Central Bank.
Sabry states that if any party wants to remove Nandalal Weerasinghe from the post of Central Bank governor, he is ready to resign instead, and that it is a big crime to lose a resource like Weerasinghe at a time when the country is facing a crisis.
The Minister says that as the decisions taken by him as the Governor of the Central Bank have benefited the people who are living their lives amid many challenges, the Minister says that he requests everyone to refrain from jumping behind the officials who take such bold decisions.
Nandalal Weerasinghe had recommended Sabry’s name for the Ministry of Finance even after Ranil Wickramasinghe became President.
Arjun Aloysius summoned for tax fraud of Rs 167 crore
Arjun Aloysius, director of W.M. Mendis Company, has been summoned to appear before the Colombo Magistrate’s Court. Colombo Additional Magistrate T.N. Ilangasinghe had issued this order.
These summons have been issued according to a complaint made by the Inland Revenue Department that Mendis Company has committed a fraud by defaulting on the payment of a tax amount of 167 crore rupees.
Arjun Aloysius, who is also named as one of the main accused in the Central Bank bond scam, is also the owner of Perpetual Treasuries.
Earlier, Mendis Company’s alcohol production activities were also suspended, but later the relevant ban was lifted by the court.
Gas prices to be further reduced from next Monday
Muditha Peiris, Chairman of Litro Company, says that gas prices will be further reduced from next Monday. The chairman says that this revision is done in relation to the decrease in the prices of the world market.
According to the new amendment, the price of a 12.5 kg domestic gas cylinder has been reduced by Rs.246 and its new price is Rs.4664. The price of a 5 kg cylinder has been reduced by Rs 99 to Rs 1872 and the price of a 2.3 kg cylinder has been reduced by Rs 45 to Rs 869.
President decides to continue to maintain the temporarily sworn-in cabinet
When the current cabinet was sworn in, it was decided to be a temporary cabinet for two weeks only. The reason for that was that the President had decided to form an all-party government or a government with the participation of several parties.
Having failed to form an all-party government, the president tried to form a majority government by involving a group of the opposition, but so far these efforts have not been successful.
Accordingly, the President has decided to continue to maintain the temporarily sworn-in cabinet. The president is trying to save an opposition group to the government side based on that decision.
Meanwhile, the group representing the Podujana Peramuna government continued to demand that another group of people be given cabinet and state minister positions. If not, a group of former state ministers have informed that they will have to think twice about supporting the budget.
The voting for the second reading of the interim budget will be held this afternoon and before that the President had agreed to give the posts of state ministers to a group of members of the Podujana Peramuna. However, it has not been seen that the relevant oath taking has taken place so far.
CBSL governor must answer to the parliament on declaring Sri Lanka as a bankrupt country
It was pointed out yesterday by the ministers of the opposition as well as the ruling party that even though before declaring Sri Lanka as a bankrupt country in April last year Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka, should have informed the Parliament about the financial situation and sought the approval of the Parliament, which has the financial power of the country, no such thing had happened.
That was during the parliamentary debate on the interim budget.
Lakshman Kiriella (SJB)-“Yesterday, the Governor of the Central Bank came to the Parliament to give a speech. In his speech, he said that when he took office, the Central Bank had only 20 million American dollars. I asked if Parliament was informed of this situation. But there was no answer! Because the ‘power of money’ belongs to the Parliament. Everyone has acted irresponsibly.”
Bandula Gunawardena (SLPP) – “I also agree that the central bank should present the matter to the parliament. It was not presented that way! So this Honorable House has to examine the question of whether the Central Bank has fulfilled its responsibility in this way.
Vajira Abeywardena (UNP) – “The central bank has no power to bankrupt the country. They could have called the representatives of the parliament in April and told them that there is such a problem in the country, what should be done. Then this whole parliament should have got together to take a decision that day”