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Sri Lanka Plans Economic Boost with New Hydrology Bill

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January 06, Colombo (LNW): Scheduled for submission to Parliament on January 9, the upcoming Hydrology Bill promises significant advancements in Sri Lanka’s maritime interests and economic gains. Crafted to establish the Hydrological Service, regulate surveys, and develop nautical maps, the bill’s discussion took center stage during a recent meeting at the Justice Ministry.

Presided over by Justice, Prison Affairs, and Constitutional Reforms Minister Dr. Wijeyadasa Rajapakshe, the session included Navy Commander Vice Admiral Priyantha Perera and Justice Ministry Secretary M.N. Ranasinghe.

Insights emerged, projecting potential annual earnings of approximately $51 million by producing and vending nautical charts to vessels navigating Sri Lankan waters. Notably, a British company, in collaboration with the NARA Institute, presently creates and sells these charts within Sri Lanka’s maritime boundaries, with Sri Lanka receiving only a fraction of the revenue generated.

The proposed bill aims to grant Sri Lanka legal authority to manage its Hydrological Service through the Sri Lanka Navy, establish a National Hydrology Office, and oversee the production of nautical charts, aligning with international economic interests.

Minister Rajapakshe underscored the bill’s significance, emphasizing its potential to substantially increase the country’s revenue stream. Asserting that this legislative move is in the country’s best interests, he affirmed discussions with the Opposition Leader and other Party leaders, asserting that opposition to such bills is unwarranted.

Navy Commander Vice Admiral Priyantha Perera further elucidated the bill’s potential economic advantages, bolstering the Minister’s stance on the need for its swift enactment.

Sri Lanka – Egypt Parliamentary Friendship Association Holds Inaugural Meeting in Parliament

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January 06, Colombo (LNW): The Sri Lanka – Egypt Parliamentary Friendship Association (PFA) for the Ninth Parliament convened its inaugural meeting in Parliament, presided over by Speaker Mahinda Yapa Abeywardana. During the session, Deputy Speaker Ajith Rajapakse was nominated by MP Mohamed Muzammil for the role of Secretary, a proposal confirmed by MP Madhura Withanage.

Geetha Kumarasinghe, the State Minister of Women and Child Affairs, assumed the position of President of the Sri Lanka – Egypt PFA.

MP Madhura Withanage, MP Hector Appuhami, and MP Aravinda Kumar were appointed as Vice Presidents of the Friendship Association, while MP Karunadasa Kodithuwakku took on the role of Assistant Secretary. MP Mohomad Muzammil was entrusted with the Treasurer position for the Sri Lanka – Egypt PFA.

Expressing his sentiments, Deputy Speaker Ajith Rajapakse highlighted the longstanding ties between Sri Lanka and Egypt, dating back to ancient times. He expressed his satisfaction at assuming this responsibility, marking 66 years since the commencement of diplomatic relations between the two nations.

Special Court to change tax appeal process preventing the law’s delay of 15 years.

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By: Staff Writer

January 06, Colombo (LNW):The government was considering establishing a special court complex within the judicial system to hear tax appeals in the backdrop that the appealing process allows any person to stay without paying taxes for 15 years.

The Minister of Justice Wijeyadasa Rajapakshe has agreed in this regard during a special meeting held in the Parliament to obtain ideas for the legal amendments to be made in order to increase the state revenue.

Chair of the Sectoral Oversight Committee on National Economic and Physical Plans Mahindananda Aluthgamage said any person can stay for 15 years without paying taxes.

“The Inland Revenue Department has 30 months under the existing Act to assess a tax file and another 24 months to consider appeals.

Accordingly, a tax file remains in the Inland Revenue Department for more than 54 months and post appealing to the Tax Appeals Commission, they receive 2 years according to the Act,” he said adding that thereafter, appeals can be made to the Court of Appeal and the Supreme Court which will last for approximately 15 years.

The Committee observed that the current period of two (02) years for the Commissioner to hear appeals is too long and it is desirable to reduce it to six (06) months.

Meanwhile, the officials of the Inland Revenue Department said that the arrears in tax revenue due on 30.06.2023 is 943 billion rupees, and Rs. 767 billion could not be recovered due to various reasons and the recoverable amount is 175 billion rupees. They said that 37 billion rupees have been collected as tax arrears last year

Sri Lanka’s total tax default and penalty for default have skyrocketed to 619.7 billion rupees at the end of 2021, the state-run Inland Revenue Department (IRD) data showed amid more tax evasions and avoidance despite two tax amnesties in the same period.

The tax default which stood at 22.5 billion rupees by end 2000 has jumped to 368.4 billion rupees by end 2021, an IRD response to a Right to Information (RTI) request showed.

The penalty imposed on taxpayers for defaulting their payments stood at 251.4 billion rupees by end 2021.

“Two tax amnesties have been given by the government during the last 22 years,” the IRD said in the response.

Though the total defaulted tax was 368.3 billion rupees, the IRD data showed only 84.5 billion rupees had been categorized as “collectable tax” as 283.7 billion rupee worth tax receivables have been disputed by the taxpayers.

Similarly, only 75 billion rupees worth of penalty was categorized as “collectable” out of the total 251.5 billion rupees due to the taxpayers have disputed or challenged in court for dues equal to 176.4 billion rupees, the IRD data showed.

CEAT goes green in Sri Lanka with 2.4 MW solar power plant at Kelaniya.

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By: Staff Writer

January 06, Colombo (LNW): Sri Lanka’s top tyre maker CEAT Kelani Holdings has completed an investment of Rs. 475.97 million in a High Tension (HT) metering roof-top photovoltaic panel solar power plant as part of the company’s efforts to reduce the carbon footprint of its manufacturing operations at its Kelaniya complex.

The 2.4 MW solar power plant installed by Regen Renewables Ltd. on the factory roof will produce 59.61 GWh in its operational period, offsetting about 21% of CEAT’s consumption of electricity from the national grid and contributing to an omission of 42,326 tons of CO₂ emissions, the company said.

The 295,200 square foot solar power plant became operational in December 2023 and will also reduce CEAT’s electricity bill, which currently accounts for about 13% of the company’s cost of production.

CEAT Kelani’s investment covered the cost of solar panels, inverters, walkways, a cleaning system, and the Ceylon Electricity Board (CEB) grid connection.

“As the manufacturer of nearly half of Sri Lanka’s requirements of pneumatic tyres, CEAT Kelani is a systemically-important contributor to the national economy, but our commitment goes deeper to encompass the community and the environment,” the company’s Managing Director Ravi Dadlani said. “This investment in renewable energy is just one example of our focus on sustainability.”

One of the most successful India-Sri Lanka joint ventures in the manufacturing sector, the CEAT Kelani joint venture’s investment in Sri Lanka over the past 10 years exceeds Rs. 8.5 billion.

The supplier of the solar power plant Regen Renewables represents SUNTECH – one of the world’s largest and most technologically advanced Tier-1 Solar panel manufacturers – and the inverter manufacturer Siemens-KACO in Sri Lanka.

Regen has been in the rooftop solar business for more than a decade and has successfully installed and commissioned over 20 MW of facilities which is equivalent to a market share of almost 10% in the rooftop industry.

Sri Lanka Plans to Broaden Tea Industry Strategy.

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By: Staff Writer

January 06, Colombo (LNW): The government is to device tea industry strategy for 2024 with an integrated approach to achieve common industry objectives, refocusing the entire tea value chain

Sri Lanka is currently reviewing the entire length of the country’s tea value chain seeking to restore profitability with environmental sustainability, according to Sri Lanka Tea Board officials.

Tea Board will look at tea as a beverage in the global market, worth US $38 billion as compared with narrow perception of the tea industry as a perennial crop, generating only $1.45billion per year

Tea export volume dipped below 2022 levels, reaching around 242 million kilos in 2023, whilst earnings increased to around $ 1.3 billion during the same period.

As per the available data, January-November 2023 cumulative exports totalled 221.16 million kilos, showing a decrease of 9.73 million kilos vis-à-vis 230.89 million kilos in the same period in 2022.

The SLTB was optimistic that the tea output will exceed 260 million kilos by the end of 2023 recovering from the 26-year low in 2022.

A high official of SLTB has attributed the decline in output to adverse weather conditions from September to December 2023, emphasizing that most of the production came from Regional Plantation Companies (RPCs) rather than traditional smallholders due to high operational costs.

Sri Lanka is to focus on strategic market campaigns on tea-consuming nations rather than focusing on global campaigns till production and productivity are achieved.

Expressing concern about the lack of technological integration in the tea industry, a senior tea board official called upon top players with financial backing to explore alternative ways, including AI and drone technologies to enhance crop yields.

SLTB plans to make use of the powerful Tea Control Act to enhance production and productivity in regional plantation corporations ( RPCs) _.
“Sri Lanka has a diverse tea production suitable for different water types to enhance taste and nutritional properties. These can be marketed according to various market segments to generate higher income from tea exports,” he said.

He stressed the responsibility of exporters to convince growers to prioritize producing high-quality Ceylon Tea.

China has emerged as Sri Lanka’s fastest-growing “new market” with interest in traditional Orthodox black tea and high-end packaging common amongst the increasing number of Chinese tourists visiting Sri Lanka,”.

SriLanka now supplies 29% of the 35 million kilograms that China imports, according to official data.

Due to U.S. sanctions that restrict trade in dollars, Iran turned to Sri Lanka and India to quench its thirst for tea. Iraq now ranks first among Sri Lanka’s tea trading partners, which include Turkey, Russia, China, the UAE, and Saudi Arabia.

SL tax net to be widen with nearly one million individuals obtained TIN.

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By: Staff Writer

January 06, Colombo (LNW): The Inland Revenue Department is resolute in reaching its target of widening the tax net while increasing the number of tax files with the registration of persons of over18 years issuing them with taxpayer information number.

The number of individuals registering with the Taxpayer Identification Number (TIN) in Sri Lanka has reached nearly 01 million, according to the Inland Revenue Department.

Previously, in the fiscal year 2022, there were only 204,467 personal tax files. However, the latest data indicates a remarkable surge, with the number now approaching the one-million mark.

Moreover, the Department reported a notable up tick in the number of tax-paying companies.

This year has witnessed a commendable 10 percent increase, with the count rising from 73,444 registered tax-paying companies in 2022 to a current total of 81,909 as of November 30 2023 .

The Inland Revenue Department’s task of collecting over Rs 1 trillion from taxes on Income and profit of 219.000 individuals and companies next year will be a mission impossible, a former treasury secretary who wished to remain anonymous said.

The government will be taking several stringent measures including legal action against those who fail to file tax returns and make the Taxpayer Identification Number (TIN) mandatory for several transactions.

These transactions included the opening of a bank current account at any bank; obtaining approval for a building plan, by the applicant, registering a motor vehicle or renew license, by the owner and for the Register a land or title to a land, by the buyer.

A special penal provision will be introduced to prosecute persons who have failed to file tax returns and provide information required by the tax official

A unique identification number is to be made mandatory for the registration of businesses and all businesses including health services, educational services and law firms have to be registered with relevant authorities at the time of commencing their businesses

Everyone above the age of 18 years failing to obtain a Taxpayer Identification Number (TIN) would be liable to a fine of Rs 50,000, the Inland Revenue Department said

In addition, anyone earning an income of more than Rs. 1,200,000 a year of assessment (from April 01 to March 31 of the following year) has to register for Income Tax.

Failure to comply with the regulations would lead to a situation where the registration will be done by the Inland Revenue Department but with penalties not exceeding Rs. 50,000.

The TIN could be both obtained by visiting the IRD in person or online. To obtain a TIN through electronic service, every individual must submit PDF copies of the scanned images of both sides of his or her national identity card, the IRD has said.

State Minister Unveils Renewables Push and Anticipated Electricity Bill Reduction

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January 06, Colombo (LNW): State Minister Indika Anuruddha revealed significant advancements in the power sector, announcing that data submitted to the Public Utilities Commission may pave the way for a revision of electricity bills by the first week of February.

During a media briefing at the Presidential Media Center (PMC) themed “Collective Path to a Stable Country,” the state minister outlined plans to procure around 600 megawatts of electricity from renewable sources in 2024.

He highlighted strides made in 2023, emphasizing the revision of the Electricity Act to prioritize consumer service and protection. Efforts toward augmenting renewable energy’s share in power generation were underscored, aiming for 70% electricity from renewable sources, with special focus on solar panel construction in projects below 10 megawatts across locations like Mannar, Pooneryn, and Hambantota.

The state minister stressed the commitment to reducing electricity bills through renewable energy utilization, leveraging hydro, solar, and wind power. Submissions to the Public Utilities Commission aimed at supporting this reduction foresee a potential decrease either by month-end or in early February.

Amid these initiatives, new employee recruitment for the Ceylon Electricity Board (CEB) has been paused. The minister highlighted future performance-based incentives and promotions for employees, ensuring pension and provident fund structures remain unchanged.

Former Health Official Arrested in Connection to Substandard Vaccine Import

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January 06, Colombo (LNW): Herath Kumara, the former Deputy Director of Health Services (supplies division), has been arrested by the Criminal Investigations Department (CID) today in relation to the importation of substandard Immune Globulin vaccines. He is set to appear before the Maligakanda Magistrate’s Court.

This arrest follows investigations into the importation of 22,500 vials of substandard vaccines, allegedly involving financial fraud amounting to Rs. 130 million. The probe, initiated last year, unveiled a scheme where a pharmaceutical company facilitated the import using forged documents, with the purported aid of senior state officials.

Sudath Janaka Fernando, operating under the alias ‘Aruna Deepthi,’ was identified as the owner of the said pharmaceutical company responsible for importing the substandard stock.

Further investigations implicated Chief Executive Officer of the National Medicines Regulatory Authority (NMRA), Dr. Vijith Gunasekera, and Ministry of Health’s Director of Supply, Dr. Kapila Wickramanayake, for allegedly providing forged ministry documents to facilitate the importation.

Previously, former Health Ministry Secretary Janaka Chandragupta was arrested in connection with the case. Additionally, in December 2023, the CID took a statement from former Health Minister Keheliya Rambukwella regarding the importation that transpired during his tenure.

Operation Yukthiya Nets 1,133 Suspects in Latest Round of Arrests

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January 06, Colombo (LNW): In the latest phase of Operation Yukthiya, authorities apprehended 1,133 additional suspects within a 24-hour period ending at 12:30 am on Saturday (06).

Police have confirmed that among those apprehended, 24 individuals are currently undergoing interrogation following detention orders. Investigations into illegal assets have been initiated against 23 of the suspects.

Further, 38 individuals have been redirected to drug rehabilitation centers as part of the operation’s efforts.

Additionally, 86 suspects listed by the Police Narcotics Bureau and Special Bureau were among those arrested, as the operation continues its concerted efforts to address various criminal activities.

Sunil Handunnetti Foresees People’s Willingness to Bear VAT Burden Until Potential Elections

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January 06, Colombo (LNW): Sunil Handunnetti, former Member of Parliament from Janatha Vimukthi Peramuna and economic expert representing the National Peoples Power (NPP), shared insights on the public’s readiness to endure the current VAT burden until a potential presidential election in August.

In an interview with Neth FM channel, Handunnetti addressed the unprecedented scenario of appointing a successive president through a parliamentary vote for a brief tenure. He highlighted the necessity for constitutional interpretations to manifest as practical implementations aligning with the populace’s readiness to tolerate the VAT burden until August.

Anticipating a potential presidential or general election, Handunnetti emphasized the procedural requisites, citing the need for parliamentary passage with a majority. He pointed out the reluctance of some individuals to relinquish privileges, indicating a reluctance to resign even for political reasons.