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Two private member’s Bills presented to amend two tax laws to bring about parliament oversight

Published

3 years ago

2023/03/9

Speaker Mahinda Yapa Abeywardena and SJB MP Eran Wickramaratne showing copies of the private members Bills presented by the latter.

SJB MP Eran Wickramaratne yesterday (08) tabled two private member’s Bills to amend both the Value Added Tax Act No. 14 of 2002 (as amended) and the Special Commodity Levy Act No. 48 of 2007.

The following is the text of a statement issued by the former State Finance Minister: “These two amendments seek to facilitate parliamentary control over public finance as constitutionality required, and prevent the executive (Minister) from abusing statutory powers, including by (corruptly) granting benefits to a chosen few.

As the people of Sri Lanka are calling for more accountability and transparency with regard to public finances in the country, I have brought these two amendments to ensure parliamentary control on any changes to Value Added Tax (VAT) and to the Special Commodities Levy.

Sri Lanka’s parliament is constitutionally supposed to have full control over public finances (article 148).

However, there is currently tax legislation that actually violates this imperative provision, and instead gives discretion to the minister on: (i) tax exemptions, (ii) tax base, and (iii) tax rate. This type of discretion is seen in two key tax acts, the Value Added Tax Act No. 14 of 2002 (as amended) and the Special Commodity Levy Act No. 48 of 2007.

In both pieces of legislation, the minister has complete discretion to change taxation and simply announce it through a gazette notification. The decision to change taxation comes into effect immediately on the Minister’s signature and will only later be approved by Parliament. Even if it is not approved, whatever actions by the minister (e.g. reducing VAT or SCL) through the Order cannot be reversed by parliament but only discontinued. This leaves an extraordinary amount of power in the minister’s hands and leaves room for the tax system to be abused in favour of vested interests and potential corrupt activities.

The well-known sugar scam from 2020 is an example of the impacts of leaving the discretionary power with the minister. Prior to October 2020, sugar taxes were LKR 50 per kilo of sugar, and were drastically reduced to 25cents per kg. This is a reduction of 99.5% taxes on imported sugar. The gap between the cost to the importer and the market price has increased substantially after the tax reduction. According to the National Audit Office of Sri Lanka, between October 2020 and February 2021 we have cumulatively lost LKR 16 billion in potential tax revenue. PublicFinance.lk has noted that the benefit of the tax reduction was not passed on to the consumer and importantly that Sri Lanka has lost approximately LKR 59 billion in cumulative revenue from October 2020 until December 2022 by cutting the SCL on sugar imports.

The discretionary power of the minister to make ad hoc changes to taxation can also have serious impact on the country’s economy. At a time when the country is facing a severe economic crisis, and when there are calls from the people to have more transparency and accountability of our public finances, it is imperative that parliament retains full control over public finance as mandated by Article 148 of the Constitution.

Therefore, I have submitted these two amendments to amend the VAT and SCL to promote fiscal accountability and ensure that decisions on taxation are transparent and are discussed in the public domain.

The government in 2022 tried to bring a new tax called the Special Goods and Services Tax (GST) Bill, which gave the minister similar powers to that which presently exists in the VAT and SCL framework. However, the Supreme Court in very strong terms held the Bill to be unconstitutional and even violated the sovereignty of the People. The Court held: Thus, by empowering the Minister in the manner provided in clauses 2 and 3, the Parliament distinctively and manifestly loses control over public finance and unconstitutionally alienates such power to the Minister. In the circumstances, this Court holds that clauses 2, 3 and 4 individually and collectively amount to an infringement of Article 148 of the Constitution read with Article 76, and by virtue of such infringement violates Article 4 read with Article 3 of the Constitution.

The proposed amendments will bring the relevant portion of the VAT and SCL laws in conformity with the constitutional framework, as recognised by the Supreme Court in the Special GST Bill Determination.”

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Related Topics:Featured SJB MP Eran Wickramaratne Speaker Mahinda Yapa Abeywardena

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President meets senior officials of the Urban Development Authority

Published

5 hours ago

2026/05/18

Priyan

A discussion between President Anura Kumara Dissanayake and senior officials of the Urban Development Authority (UDA) was held this afternoon (18) at the Presidential Secretariat.

The meeting focused extensively on new development projects planned by the Urban Development Authority. The President emphasised the need to ensure that the budgetary allocations made for these projects in the current year are utilised effectively within the same financial year.

Detailed discussions were also held on projects planned to be implemented jointly by multiple institutions, including the importance of holding consultations with all relevant agencies to reach final decisions and the need to clearly define responsibilities for each institution in both implementation and maintenance phases of the projects.

Attention was drawn to key initiatives such as the Kelani River flood control project, water management projects in Colombo city and the Beira Lake restoration project. The need for a dedicated programme for low-income housing in areas such as Ratmalana and Moratuwa was also highlighted. During the discussion, Minister of Transport, Highways and Urban Development Bimal Rathnayake underscored the importance of introducing a structured management framework for the effective coordination of certain projects.

Deputy Minister of Urban Development, Eranga Gunasekara, Secretary to the Ministry of Transport, Highways and Urban Development, Senior Professor Kapila C.K. Perera, Chairman of the Urban Development Authority (UDA), M.G. Hemachandra and the Heads representing the Urban Settlement Development Authority (USDA), Sri Lanka Land Development Corporation (SLLDC), National Physical Planning Department (NPPD) and the Condominium Management Authority (CMA) were also present at the meeting.

(PMD)

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CEAT Kelani Branch Inter-Company Employees’ Union makes donation to the ‘Rebuilding Sri Lanka’ Fund

Published

5 hours ago

2026/05/18

Priyan

The Inter-Company Employees’ Union of the Kelaniya Branch of CEAT Sri Lanka has made a financial donation of Rs. 1,148,000.00, a day’s salary of its members to the ‘Rebuilding Sri Lanka’ Fund established to support the restoration of livelihoods and the rebuilding of areas affected by cyclone Ditwah.

Secretary of the Inter-Company Employees’ Union of the CEAT Kelani Branch, D.G.S.D. Navaratne, handed over the donation to the Chief of Staff to the President, Prabhath Chandrakeerthi at the Presidential Secretariat this morning (18).

Treasurer of the Inter-Company Employees’ Union of the CEAT Kelani Branch, Y.P.I.C. Karunathilaka, together with members of the Executive Committee, were also present on the occasion.

(PMD)

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Prime Minister off to the United Kingdom to participate in the 22nd Annual Commonwealth Education Forum

Published

6 hours ago

2026/05/18

Priyan

Prime Minister Dr. Harini Amarasuriya departed on an official visit to the United Kingdom to participate in the 22nd Annual Commonwealth Education Forum and the Commonwealth of Learning (COL) 2026 Board of Governors Meeting.

During the visit, the Prime Minister is scheduled to participate in several high-level academic and diplomatic engagements aimed at strengthening cooperation in the fields of education, development studies, research collaboration, and international partnerships.

As part of the visit, the Prime Minister will meet with Ms.Bridget Phillipson, Secretary of State for Education of the United Kingdom, at the UK Department for Education, to discuss areas of cooperation in education and related sectors. She is also expected to meet Ms.Yvette Cooper, Foreign Secretary of the United Kingdom, for discussions on matters of bilateral interest and cooperation between Sri Lanka and the United Kingdom.

In addition, the Prime Minister is expected to meet Ms.Shirley Ayorkor Botchwey, Secretary-General of the Commonwealth, on the sidelines of the 22nd Annual Commonwealth Education Forum and the Commonwealth of Learning (COL) 2026 Board of Governors Meeting.

During the visit, the Prime Minister will attend a public event at the Institute of Development Studies at the University of Sussex and she will also take part in the ceremony marking the 60th Anniversary of the Institute of Development Studies. The Prime Minister is also scheduled to address a session at the Oxford School of Global and Area Studies at the University of Oxford, followed by a question-and-answer session with scholars and students.

The visit is expected to strengthen Sri Lanka’s engagement with academic institutions, international development partners, and Commonwealth member states, particularly in the areas of education, research, policy dialogue, and capacity building.

[Prime Minister’s Media Division]