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Govt compels to introduce imputed rental income tax till property tax in place

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By: Staff Writer

June 17, Colombo (LNW): The government is compelled to introduce to introduce imputed rental income tax instead of property tax which is delayed due administrative issues connected with its formulation, finance ministry announced.

The envisaged property tax is in an advanced stage of design and therefore, it is premature to outline specific details of rates and thresholds.

However, the focus of this tax is on high wealth individuals, and not on average income earners. This objective will be achieved by a suitable tax-free threshold to ensure that the tax is targeted on very high value property or multiple properties that are owned by wealthy members of society.

This specific targeting is evidenced by the fact that the tax is expected to yield 0.2% of GDP by 2025 and 0.4% of GDP in a full year in 2026. 

The design of the tax will also ensure appropriate set off mechanisms to avoid double taxation and any elements that distort economic incentives. Property taxes are implemented in many countries (including developing countries like India) since they are considered to be a highly efficient, progressive, and non-distortive means of generating revenue to fund public services, the ministry disclosed.

However professor in the Department of Economics and Statistics at the University of Peradeniya Wasantha Athukorala, a, alleges that the government is working to introduce an imputed rental income tax, as it has failed to prepare plans for the implementation of a property tax by April 2025, as proposed by the International Monetary Fund (IMF).

Furthermore, Prof. Athukorala expressed that if a property tax is implemented in the country, all ill-gotten gains will be exposed.

It was announced that Sri Lanka will likely introduce an imputed rental income tax, as part of the ongoing revenue mobilization efforts.

The new tax comes as a substitute for the property tax, as the introduction of the property tax and the gift and inheritance tax by 2025 encountered delays, due to constitutional restrictions on sharing revenues between the central and local authorities and the lack of adequate information on property values.

Accordingly, Sri Lanka will promptly initiate preparatory work to introduce an imputed rental income tax, though the expected gains would only fully materialize in 2026.

The imputed rental income tax on owner-occupied and vacant residential properties will be introduced before the beginning of the tax year on April 1st, 2025, as per the IMF Country Report No. 24/161.

To ensure that the imputed rental income tax is fully operational by 2026, Sri Lanka will undertake the following measures;

Establish the first database on estimated current market values by end-December 2024 with immediate efforts to;

(i) Digitize the valuation records held by the government valuation department, starting with municipal councils, finalizing this effort by end-2025,

(ii) Collect information from a representative sample of 5,000 standard properties that includes key variables, including annual values, latest assessment date, and property type, of all   properties in all municipal councils by August 2024.

President distributes more than 1,500 freehold deeds to Mahaweli, Walawe settlers

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June 17, Colombo (LNW): As part of the ‘Urumaya’ national initiative, President Ranil Wickremesinghe today (17) has distributed 1,524 freehold deeds to eligible settlers in the Mahaweli and Walawe regions.

The distribution ceremony took place at the Embilipitiya Mahaweli office auditorium.

This programme aims to grant a total of two million freehold deeds nationwide.

Additionally, the President conducted a symbolic deed distribution event in the Mannar district, awarding 442 deeds at the Mannar Municipal Council auditorium yesterday.

Sri Lanka Original Narrative Summary: 17/06

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  1. President Ranil Wickremesinghe underscores the Hajj celebration as a catalyst for fostering sentiments of equality and fraternity among all individuals, imparting a profound message for global peace: In his address marking the Hajj festival, the President extends his sincere wishes to the Muslim community in Sri Lanka and across the globe, encouraging a meaningful observance where collective efforts converge to realise the universal aspirations of humanity.

  2. SJB MP Eran Wickramaratne says the economy of Sri Lanka cannot be developed, should the country fail to build a united nation at the social and political level: asserts the economy cannot develop if there is no political stability: reveals the people and political leaders of the North asked Opposition Leader Sajith Premadasa to reactivate the Office of Missing Persons and the Office established to compensate for the losses in the North: assures these requirements will be fulfilled under a SJB-rule.

  3. Ruling Party MP S.B. Dissanayake says both President Ranil Wickremesinghe and the Sri Lanka Podujana Peramuna (SLPP) will fail if the SLPP does not back Wickremesinghe in the upcoming Presidential Polls: suggests that the two parties, therefore, should reach a consensus, and Wickremesinghe, accordingly, too has to provide the necessary initiative for such agreement.

  4. Foreign Minister Ali Sabry announces Japan plans to resume paused development projects in Sri Lanka upon the country’s debt repayment commencement: discloses plans for negotiations during his upcoming visit to Japan in July, aiming to finalise project restarts: Assurances were received that all Japanese-supported initiatives would resume post-agreement with bilateral creditors.

  5. Education Minister Susil Premajayantha announces Grade 5 exam changes: 30% based on 4th and 5th-grade classroom work: emphasises need for comprehensive evaluation, proposes teacher-conducted assessments: reveals reforms at Naththandiya event; plans 2,500 smart board distribution to top schools from August.

  6. The management of Colombo Lotus Tower (Private) Limited announces plans to illuminate the iconic structure in vibrant shades of green and white today (17), marking the occasion of the Eid al-Adha Hajj Festival: The initiative seeks to celebrate and honour the significant cultural and religious event within the community.

  7. The Export Development Board (EDB) launches Sri Lanka’s ‘Creative Sri Lanka 2030’ export brand at London’s ‘Sourced Sri Lanka Textile & Apparel Roadshow’, promoting sustainability and national identity.

  8. The National Water Supply and Drainage Board announces an interruption in water supply to several areas: Godagama, Homagama, Pannipitiya, Pelanwatta, Rukmalgama, and Mattegoda: The disruption is due to damage sustained by the transmission pipeline originating from the Kalatuwawa Treatment Plant: Reports indicate that the pipeline ruptured at Godagama near the High-Level Road following a vehicular accident earlier today, resulting in significant damage to the infrastructure.

  9. Authorities urge verification of plainclothes officers’ IDs after Maradana robbery by imposters posing as police: assert the public is entitled to verify plainclothes officers’ IDs: Victims assaulted, belongings worth Rs. 200,000 stolen: Police arrest suspect linked to robbery after seizing heroin; hunt ongoing for second suspect.

  10. Sri Lanka, despite being eliminated, beat the Netherlands by 83 runs in the T20 World Cup Group D match at Daren Sammy Stadium: Kusal Mendis and Charith Asalanka scored 46 each, setting a record 201-run total: Netherlands faltered to 118 all out, with Nuwan Thushara taking 3 wickets.

Minister unveils overhaul of Grade 5 Exam and curriculum evaluation

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June 17, Colombo (LNW): Education Minister Susil Premajayantha has announced significant changes to the local school curriculum, including reforms to the Grade 5 scholarship examination.

Starting from the current academic year, 30 per cent of the exam marks will be based on classroom work completed during the 4th and 5th grades, according to the Minister.

There is need for a more comprehensive evaluation of children’s education, and the current examination system, therefore, requires revision, Premajayantha emphasised.

He proposed that a substantial portion of the marks should reflect performance over a two-year period, with assessments conducted by teachers.

The Minister disclosed these reforms while speaking at a school event in Naththandiya.

Furthermore, Premajayantha outlined plans to distribute 2,500 smart boards to the country’s leading schools between August and September this year, marking the initial phase of the programme.

Sri Lanka launches ‘Creative Sri Lanka 2030’ export brand at London Textile Roadshow

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June 17, Colombo (LNW): The Export Development Board (EDB) is set to launch Sri Lanka’s National Export Brand, ‘Creative Sri Lanka 2030’, at the inaugural ‘Sourced Sri Lanka Textile & Apparel Roadshow’, commencing today (17) and concluding tomorrow, at Lindley Hall in London.

Manoja Dissanayake, Director of Industries Promotion at EDB, highlighted that the launch will take place during a panel discussion on the second day of the event.

We take pride in emphasising that Sri Lanka’s exports consistently reflect sustainability, competence, and authenticity,” stated Dissanayake. “These principles underpin the development of our National Export Brand, providing a cohesive approach and a robust national identity for our export sector.

The branding of Sri Lanka’s export sector as “Your Vital Island” signifies its role as a crucial sourcing destination, offering high-quality products rooted in sustainability, competence, and authenticity.

The country’s offerings under this brand encompass diverse premium segments such as apparel, Ceylon tea, spices, coconut products, food and beverages, fishery products, rubber, ceramics, porcelain, boat and shipbuilding, as well as electrical and electronic goods, alongside strong service sectors like ICT and logistics.

This occasion marks a significant milestone for Sri Lanka’s export sector, as we unveil our National Export Brand in the esteemed company of industry leaders,” added Dissanayake.

She also highlighted efforts to actively involve numerous SMEs in London, aiming to familiarise them with both the UK and EU markets.

The ‘Sourced Sri Lanka’ event is organised by the Lanka Apparel Sourcing Association (SLASA), Export Development Board (EDB), Joint Apparel Association Forum (JAAF), and is supported by the Sri Lankan High Commission in the UK.

Authorities warn public of individuals impersonating as Police officers in plainclothes

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June 17, Colombo (LNW): The public is entitled to request official identification from persons appearing as plainclothes officers before consenting to any checks, authorities emphasised.

The announcement follows an incident in Maradana area where an individual was robbed by individuals impersonating as police officers.

Two individuals on a motorcycle, claiming to be police officers, stopped a pedestrian near Ketawalamulla Junction in Maradana on Friday night, and allegedly assaulted the victim and stole his wallet and mobile phone, valued at approximately Rs. 200,000, according to reports.

The suspects then demanded Rs. 35,000 from the victim for the return of the stolen items, directing him to the Maradana Police Station.

In response to the complaint, Police initiated an investigation.

On Saturday (15), Maradana Police officers acted on information regarding a person allegedly transporting heroin on a motorcycle. They intercepted the motorcycle at Fonseka Mawatha, conducted a search, and discovered 12 grammes and 120 milligrammes of heroin in the possession of the rider.

The arrested suspect, a 28-year-old resident of Maradana, was found to be using the same motorcycle associated with the earlier robbery.

Subsequent inquiries and interrogation of the suspect led to the recovery of the stolen mobile phone concealed at the suspect’s residence.

Maradana police are currently pursuing further leads to apprehend the second suspect involved in the robbery.

Water supply disruption in several areas following pipeline damage

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June 17, Colombo (LNW): The National Water Supply and Drainage Board (NWSDB) has announced an interruption in water supply to several areas.

Accordingly, Godagama, Homagama, Pannipitiya, Pelanwatta, Rukmalgama, and Mattegoda areas will experience a disruption in the supply of water until further notice.

The disruption is due to damage sustained by the transmission pipeline originating from the Kalatuwawa Treatment Plant.

Reports indicate that the pipeline ruptured at Godagama near the High-Level Road following a vehicular accident earlier today (17), resulting in significant damage to the infrastructure.

President’s message for Hajj celebration

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June 17, Colombo (LNW): President Ranil Wickremesinghe has underscored the Hajj celebration as a catalyst for fostering sentiments of equality and fraternity among all individuals, imparting a profound message for global peace.

In his address marking the Hajj festival, the President extended his sincere wishes to the Muslim community in Sri Lanka and across the globe, encouraging a meaningful observance where collective efforts converge to realise the universal aspirations of humanity.

President’s Full Statement:

“To achieve spiritual and worldly success, individuals must abandon selfishness and embrace a life of sacrifice and harmony. Muslims celebrate the Hajj festival each year with this noble aim in mind.

On this occasion, Muslims from around the globe gather at a single place of worship, united in purpose, to pray for communal values that embody the hope of humanity. The Hajj celebration fosters feelings of equality and brotherhood among all people, delivering a profound message for world peace.

I extend my heartfelt wishes to the entire Muslim community in Sri Lanka and around the world for a meaningful Hajj celebration, where everyone comes together to fulfill the aspirations of humanity.”

Education Minister announces VRS option for teachers amidst student enrolment challenges

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June 17, Colombo (LNW): Education Minister Susil Premajayantha announced during the inauguration of the new three-storey Faculty of Technology building at Natathandiya Dhammissara College that teachers would have the opportunity to opt for a Voluntary Retirement Scheme (VRS) after five years due to the absence of students in Ordinary Level (O/L) and Advanced Level (A/L) classes.

He emphasised the importance of teachers and principals actively participating in school activities without resorting to strikes.

Premajayantha highlighted the challenges in schools, noting that students may not enrol in GCE O/L and A/L classes within the next five years due to the current educational environment in government schools.

He stressed that students must continue to pass exams and seek knowledge through alternative means.

The Minister expressed concern that some students might choose to leave government schools and enrol in private institutions or pursue education abroad.

“The students will explore other avenues for their education as long as the issues concerning teachers and principals remain unresolved,” Premajayantha remarked.

Colombo Lotus Tower to illuminate in green and white for Eid al-Adha Festival

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June 17, Colombo (LNW): The management of Colombo Lotus Tower (Private) Limited has announced plans to illuminate the iconic structure in vibrant shades of green and white today (17), marking the occasion of the Eid al-Adha Hajj Festival.

This initiative seeks to celebrate and honour the significant cultural and religious event within the community.