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Govt. urged to crack down on tax evaders instead of taxpayers, says MP Harsha de Silva

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Harsha Silva

SJB MP and Chairman of the Committee on Public Finance, Harsha de Silva, on Thursday (02), urged the government to take action against tax evaders instead of harassing law-abiding taxpayers.

According to MP Harsha de Silva, the government expected to collect Rs. 718 billion as corporate and personal income taxes for 2023, but as of October 16, 2023, the actual collection had reached only Rs. 495 billion. However, in a surprising contrast, PAYE taxes, which were projected to yield 100 billion rupees, had already exceeded expectations, bringing in 119 billion rupees. Therefore, he proposed to amend the current PAYE tax structure, as the government would go on to collect 125 billion rupees at the current compliance level and 175 billion rupees at a 100% compliance rate.

Furthermore, withholding tax collections exceeded expectations, he said. The government had anticipated 90 billion rupees but collected almost 122 billion rupees, showcasing that forcibly enforced taxes are being collected, while voluntary compliance remains substantially low.

MP Harsha also highlighted significant shortfalls in other tax categories. The Betting and Gaming levy, expected to generate 10 billion rupees, only managed 5.6 billion rupees. Similarly, Value Added Taxes (VAT) were projected to contribute 553 billion rupees, but collections stand at 350 billion rupees, with concerns raised about the upcoming VAT changes.

“This discrepancy in tax collection calls into question the government’s approach to fiscal-based revenue consolidation. It prompts concerns about the fairness of increasing taxes on honest taxpayers while allowing a significant portion of potential revenue to go uncollected from tax evaders. Moreover, the inconsistency in tax policies, with the same individuals who reduced taxes to 8% in 2019 now responsible for an 18% increase, further deepens public skepticism about the government’s policy direction,” he said.

MP Harsha de Silva also cited an example from the Excise Department, where the government had aimed to collect 217 billion rupees, inclusive of liquor tax, tobacco tax, sticker tax etc. However, the actual collection stands at just 124 billion rupees, creating a substantial 92 billion rupees shortfall.

“My comments serve as a wake-up call for the government to address the issue of tax evasion and to rethink its approach to tax collection. Prioritizing the collection of taxes from tax evaders rather than increasing the burden on law-abiding citizens is crucial for a fair and equitable tax system. The public is now looking to the government to take action to rectify the situation and ensure a more balanced and just tax system for all,” he said.



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INS Airavat makes port call in Colombo

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The Indian Naval Ship (INS) Airavat arrived at the Port of Colombo for Operational Turnaround on 01 Jun 26. The visiting ship was welcomed by the Sri Lanka Navy (SLN) in compliance with time-noured naval traditions.

INS Airavat is a Landing Ship Tank, commanded by Commander IP Patil.

During their stay in the island, the ship’s crew is scheduled to take part in a series of professionally enriching events and camaraderie-building programmes organised by the Sri Lanka Navy.

The Indian naval personnel will also tour several historic and prominent tourist attractions across the country before the ship concludes her deployment.

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BASL asks govt. to abandon plan to raise retirement ages of CA and SC judges

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… tells Prez such arbitrary change neither necessary nor desirable

The Bar Association of Sri Lanka (BASL) has urged President Anura Kumara Dissanayake to abandon the controversial plan to increase the retirement age of the judiciary, including the Court of Appeal and the Supreme Court.

In a statement issued by the BASL President Rajeev Amarasuriya and its Secretary Nalin de Silva, the BASL pointed out that the proposed increase of the retirement age of the judiciary would undermine the independence, integrity, dignity, and public confidence in the Judiciary, which is essential for the maintenance of the Rule of Law and democratic governance in Sri Lanka.

The text of the BASL statement: “The Bar Association of Sri Lanka (hereinafter referred to as “BASL”) notes with grave concern reports in the public domain that the Government is considering the introduction of an amendment to the Constitution to increase the age of retirement of Judges of the Court of Appeal and the Supreme Court.

It is the considered view of the BASL that the age of retirement of the judges of the Court of Appeal and the Supreme Court which has stood at 63 years and 65 years respectively from the promulgation of the 1978 Constitution, should not be changed arbitrarily and that such a change is neither necessary nor desirable.

To do so will result in the loss of public confidence in the integrity of the legal system and of the Government’s commitment to preserve and protect the rule of law and the independence of the judiciary. Members of the public are likely to question the motives of the Government in bringing in a Constitutional amendment solely for this purpose.

Your Excellency is no doubt aware that the cadre of the Judges of the Court of Appeal was increased from 12 to 20 Judges (including the President of the Court of Appeal) and that of the Supreme Court from 11 to 17 Judges (including the Chief Justice) by the 20th Amendment to the constitution certified on 29th of October 2020. With such enhancement, workwise, there cannot be a real requirement to extend the retirement ages of these judges.

Your Excellency is aware that altering the retirement age of judges of the apex courts would have to be done through a Constitutional amendment. For many years Sri Lanka’s Constitution has been subject to ad hoc amendments, sometimes in order to cater to the political needs of the government in power and often contrary to the interests of the rule of law, the independence of the judiciary and the judiciary.

Extending the retirement age of the sitting Judges of these Courts at this point of time is likely to be viewed by the public as a blatant attempt to interfere with the judiciary. We believe that to go ahead with such an ad hoc move will also be an affront to the Honourable Judges of those courts.

If the Government goes ahead with such a move it will set a dangerous precedent for future Governments too to introduce ad hoc amendments to the Constitution in respect of the functions of the Judiciary.

The independence of the Judiciary and the public confidence reposed in it, are indispensable pillars of the Rule of Law and the democratic framework of our Republic. In that regard, it is of paramount importance that the Judiciary must not only remain independent in fact, but must also be seen by the public to be wholly independent, impartial, and free from even the slightest perception of influence, favour, accommodation, or impropriety.

The Bar Association of Sri Lanka is therefore constrained, in the discharge of its duty to uphold and safeguard the Rule of Law and the independence of the Judiciary, to respectfully express its serious concern regarding any such proposed amendment, which is neither in the interests of the Judiciary and nor of the people.

In the circumstances, the BASL respectfully urges Your Excellency not to proceed with any proposed constitutional amendment seeking to increase the retirement age of the members of the Judiciary including Judges of the Court of Appeal and the Supreme Court.

We remain confident that Your Excellency will give due consideration to the importance of preserving and protecting the independence, integrity, dignity, and public confidence in the Judiciary, which is essential to the maintenance of the Rule of Law and democratic governance in Sri Lanka.”

Govt. declines to respond

A member of the Cabinet yesterday declined to comment on the BASL’s letter to President Anura Kumara Dissanayake. The Minister said that he wouldn’t comment for the time being.

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New US tariffs proposed on 60 countries, including Sri Lanka

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12.5% additional duties on goods imported from Colombo

The US has proposed additional duties of 10% or 12.5% on imports from 60 economies, including Sri Lanka, over their alleged failure to curb trade in ‌goods made with forced labour.

The proposal made by US Trade Representative’s (USTR) office in terms of Section 301 unfair trade practices investigation to be released, news agencies reported, pointing out that the Trump administration was seeking to rebuild its emergency tariffs, which were struck down by a US Supreme Court decision in February.

The USTR said it determined that it would impose 10% duties related to ⁠the forced labour investigation on imports from Canada, Ecuador, the European Union, Indonesia, Mexico, Pakistan, Argentina, Bangladesh, Cambodia, El Salvador, Guatemala, Indonesia, Malaysia, Taiwan and Britain.

The trade agency said it would impose additional duties of 12.5% on the remaining 45 countries that were investigated.

“The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable,” US Trade Representative Jamieson Greer said in a statement. “This creates a dynamic where American workers are forced to compete globally on an unlevel playing field.”

According to the trade agency, the USTR found that Sri Lanka has failed to impose and effectively enforce a forced labour import prohibition.

The USTR noted that the results of its investigation indicate that the acts, policies and practices of Sri Lanka related to the failure to impose and effectively enforce a forced labour import prohibition are unreasonable and burden or restrict US commerce.

Accordingly, it has proposed to impose 12.5% additional duties on goods imported from Sri Lanka.

The USTR said it also was proposing a textile mechanism that would allow for a certain volume of apparel and textile imports ‌to ⁠enter the US at a reduced tariff rate, though the duties and volumes were not disclosed.

The announcement comes ahead of the July 24 expiration of a 10% temporary tariff imposed by the Trump administration on February 20, the day the Supreme Court struck down US President Donald Trump’s tariffs under the International Emergency Economic Powers Act.

On Monday, the USTR proposed ⁠a 25% duty on many Brazilian goods as a result of a Section 301 investigation into the country’s digital trade practices and preferential tariffs. The trade agency is also expected to soon unveil the findings of another major Section 301 probe into ⁠the buildup of excess industrial capacity in 16 trading partners, including China.

In the forced labour findings, the USTR said it would exempt from the tariffs a number of products, including energy, rare earths and certain ⁠other metals, beef, coffee, certain fruits and vegetables, pharmaceuticals, organic chemicals and aircraft parts.

The USTR said it would accept public comments on the proposed tariffs and other remedies through July 6, with a public hearing scheduled for July 7.

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