News

‘Abolition of range of taxes in Nov 2019 triggered crisis’

Published

4 years ago

2021/08/2

Sahan Weerasooriya

‘Welcome fuel price hike, stresses need to increase gas price’

By Shamindra Ferdinando

Former Governor of Uva, Southern and Central Province Rajith Keerthi Tennakoon says the government is paying a huge price for the continuing failure to streamline the tax collection process, corrupt practices and the utterly unwise decision to change the tax policy immediately after the change of government in Nov 2019.

Civil society activist Tennakoon alleged that the Treasury lost well over Rs. 500 bn due to a controversial decision to do away with a range of taxes, including PAYE (Pay As You Earn), NBT (Nation Building Tax), Withholding tax, Capital Gain tax imposed on the Colombo Stock Exchange, Bank Debit tax and unprecedented reduction of VAT (Value Added Tax).

Tennakoon said that the 15% VAT and the 2% NBT which amounted to 17% imposed on all goods and services were unified and reduced to 8%, effective from the first of December 2019.

Tennakoon said that the decision was taken at the first cabinet meeting of the incumbent government held on Nov 27, 2019.

The civil society activist turned political henchman under President Sirisena, asked whether ordinary people benefited from those tax cuts though the government spokespersons repeatedly said so.

Referring to the Central Bank Report 2020, Tennakoon said that the total revenue for 2018 and 2019 had been Rs 1,950 bn and Rs 1,900 bn, respectively, whereas it dropped to Rs 1,373 in 2020. Tennakoon asked whether the government carried out a proper study before such a drastic revision of tax policy was implemented or simply went ahead with it in view of the parliamentary election scheduled for April of the following year. The election had to be put off for August 2020 due to the first Covid-19 eruption, Tennakoon pointed out, urging the government to undertake a tax review immediately or face the consequences.

The total government revenue as a percentage of the GDP (Gross Domestic Product) dropped to 9.05% in 2020 from 12.6% in the previous year whereas tax revenue dropped to 8.5% from 11.6%, Tennakoon said.

He however welcomed the government decision to increase fuel prices. Declaring the upward price revision announced by Energy Minister Udaya Gammanpila on June 11 was timely, the former Governor said that the country would have been in a far worse situation if the unrealistic old pricing structure was retained.

Tennakoon said that the Opposition hadn’t really understood the crisis the country was in. If they actually examined the situation, it wouldn’t have moved a No Confidence Motion (NCM) against Energy Minister Gammanpila over the increase in fuel prices, Tennakoon said.

Instead, he argued that the NCM should have been moved against the government for jeopardizing the national economy by foolish political decision to abolish a sound tax structure in place, the former Executive Director of polls monitoring body CAFFE (Campaign for Free and Fair Elections) said.

Tennakoon questioned the rationale in demanding that the fuel prices be brought down at a time all political parties represented in parliament should address the overhanging foreign and local debt as a menacing national challenge. Pointing out that the country’s growing oil bill could overwhelm the national economy unless remedial measures were taken, Tennakoon emphasized that there should be a national consensus on the fuel pricing formula regardless of the government in power.

Those who demanded Minister Gammanpila’s resignation over the fuel price increase were conveniently silent now because they were aware of the actual situation, Tennakoon said.

Responding to another query, Tennakoon urged the government to revise the prices of domestic and industrial gas without further delay.

Tennakoon said that the government should take the public into confidence. It shouldn’t hesitate to explain the difficulties experienced due to choking of major revenue sources- remittances from Sri Lankans working abroad, tourism, garments and other exports, he said.

The civil society activist applauded the stand taken by the Energy Minister amidst attacks on him. Nothing that Presidential Secretariat, too, acknowledged the threat faced by the banking system due to CPC and CEB debt to Bank of Ceylon and People’s Bank to the tune of Rs 737 bn and President Gotabaya Rajapaksa acknowledging the daunting challenge in annual debt payment amounting to USD 4 bn, Tennakoon said that the country was experiencing worst post-independence crisis.

Whatever various government spokespersons uttered, the country was in such economic turmoil, the situation couldn’t be reversed only by restructuring the country’s debt with the IMF’s intervention, Tennakoon said.

Referring to the recent report of COPA (Committee on Public Accounts) report handed over to the Parliament on July 20, Tennakoon pointed out the failure on the part of the Inland Revenue, Sri Lanka Customs and Excise Department was quite shocking. The Finance Ministry couldn’t absolve itself of the responsibility for proper overseeing of the tax collection structure, Tennakoon said.

Commenting on shocking revelations made by a 22-member parliamentary watchdog in its latest report, Tennakoon emphasized corruption paved the way for irregularities. Such practices caused automatic losses to the Treasury, he said. Alleging that successive governments turned a Nelsonian eye to such brazen corrupt practices, Tennakoon said that the national economy was now in such a precarious situation, immediate remedial measures were required to thwart a calamity.

Quoting from CBSL reports, Tennakoon said that the country’s overall debt now stood at over 16.2 trillion. The government should realize that the issue at hand couldn’t be addressed by printing money and propaganda, Tennakoon said. The SLPP should never have abolished the entire range of taxes at the onset of the new administration, Tennakoon said, urging the government to examine the need to change the overall tax structure. How could they justify overly indirect taxes whereas the direct tax regime remains absurdly low?

Tennakoon insisted that the national economy couldn’t be saved by giving tax amnesty to defaulters. Such tax amnesties announced by successive governments since the 1960s didn’t produce the desired results, he said.

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Breakaway JVP faction decries Indo-Lanka MoUs as betrayal

Published

5 hours ago

2025/04/8

Sahan Weerasooriya

Pubudu

… alleges Kanchana’s Electricity Act exploited to facilitate ‘deal’ with India

The Frontline Socialist Party (FSP) has alleged that President Anura Kumara Dissanayake entered into seven MoUs/Agreements with India without consulting Parliament or the Cabinet of Ministers.

Accusing President Anura Kumara Dissanayake, who is the leader of the Janatha Vimukthi Peramuna (JVP), as well as the National People’s Power (NPP), of undermining Sri Lanka’s sovereignty, the breakaway JVP faction pointed out the signing of seven MoUs/Agreements had coincided with the 54th anniversary of the JVP’s first insurrection.

The top FSP spokesman and their Education Secretary, Pubudu Jayagoda, told a press conference, at their Nugegoda party office, that the JVP had completely betrayed those who sacrificed their lives during the 1971 and 1987-1990 insurrections. Having completely changed its policy towards India, the JVP was now down on its knees before India, Jayagoda said.

The dissident JVPer emphasised that such vital MoUs/Agreements couldn’t be finalised without proper consultations. Declaring that the MoUs/Agreements hadn’t been released yet, Jayagoda said that the FSP, in terms of the Right to Information Act, sought the copies of them as the public couldn’t be deprived of their right to know.

The section, now calling themselves FSP, split from the JVP in early 2012 after major differences among the top leadership over the direction of the party. Anura Kumara Dissanayake succeeded Somawansa Amarasinghe as the JVP leader in Dec. 2014.

Referring to the MoU, in respect of the implementation of HVDC interconnection for import/export of power, Jayagoda said that the NPP took advantage of the new Electricity Act that was enforced by the Wickremesinghe-Rajapaksa government in late June last year to pave the way for a deal with India. The JVP-led NPP that moved court against the then Power Minister Kanchana Wijesekera’s Bill, and voted against the Bill at the second reading, exploited the same to its advantage, Jayagoda charged.

The Sri Lanka Electricity Bill repealed the 1969 Ceylon Electricity Board (CEB) Act and subsequent laws regarding the electricity industry.

Comparing the MoU, signed in the presence of President Dissanayake and Premier Narendra Modi, Jayagoda said that both Nepal and Bangladesh had been trapped in similar agreements they signed earlier.

Jayagoda alleged that Nepal was in such a pathetic situation even if they could meet electricity requirement through hydro-power generation, the agreement with India compelled them to obtain power from India.

Jayagoda pointed out that the government now boasted of a proposed new120 MW solar power plant at Sampur to be implemented in two stages after having crippled domestic solar power generation capacity. The former JVPer said that the NPP government was bending backwards to appease India and pursuing an agenda inimical to Sri Lanka.

Jayagoda dealt with the MoU on cooperation in the field of sharing successful digital solutions implemented at population scale for digital transformation. The FSP spokesman said that the Indian-funded project to issue digital NIC would be disastrous as it would enable India to gather information.

Commenting on a MoU that covered the health sector, Jayagoda alleged that the government had agreed to share authority exercised by the National Medicine Regulatory Authority (NMRA) with India.

Jayagoda said that the MoU on defence cooperation undermined the country’s vital security interests and jeopardised relations with other countries.

The FSP said that political parties, represented in Parliament, were largely silent and seemed to be reluctant at least to express their views on the betrayal of the country.

By Shamindra Ferdinando

News

Adani’s Colombo Terminal commences operations

Published

5 hours ago

2025/04/8

Sahan Weerasooriya

A bulk carrier at the newly operational Colombo West terminal(pic courtesy Adani group)

Adani Ports and Special Economic Zone Ltd. (APSEZ), India’s largest integrated transport utility, has announced the commencement of operations at the Colombo West International Terminal (CWIT), located at the Port of Colombo, the company said in a statement issued simultaneously in Ahmedabad and Colombo yesterday (07)

Developed under a landmark public–private partnership, CWIT is operated by a consortium comprising India’s largest port operator Adani Ports & SEZ Ltd., leading Sri Lankan conglomerate John Keells Holdings PLC, and the Sri Lanka Ports Authority, under a 35-year Build, Operate, and Transfer (BOT) agreement.

The CWIT project represents a significant investment of USD 800 million and features a 1,400-metre long quay and 20-metre depth, enabling the terminal to handle approximately 3.2 million Twenty-foot Equivalent Units (TEUs) annually. It is the first deep-water terminal in Colombo to be fully automated, designed to enhance cargo handling capabilities, improve vessel turnaround times and elevate the port’s status as a key transshipment hub in South Asia.

Construction began in early 2022 and has since achieved rapid progress. With the installation of cutting-edge infrastructure now nearing completion, CWIT is poised to set new benchmarks in operational efficiency and reliability in regional maritime logistics.

“The commencement of operations at CWIT marks a momentous milestone in regional cooperation between India and Sri Lanka,” said Chairman of the Adani Group Gautam Adani. “Not only does this terminal represent the future of trade in the Indian Ocean but its opening is also a proud moment for Sri Lanka, placing it firmly on the global maritime map. The CWIT project will create thousands of direct and indirect jobs locally and unlock immense economic value for the island nation. It also stands as a shining example of the deep-rooted friendship and growing strategic ties between the two neighbours, and of what can be achieved through visionary public–private partnerships. Delivering this world-class facility in record time also reflects the Adani Group’s proven ability to efficiently execute large-scale critical infrastructure projects anywhere in the world.”

“We are proud to see the progress in the development of the West Container Terminal, a project that strengthens Sri Lanka’s position as a regional maritime hub,” said Chairperson, John Keells Group Krishan Balendra. “This project is one of the John Keells Group’s largest investments and is among the most significant private-sector investments in Sri Lanka. Together with the Sri Lanka Ports Authority and the Adani Group, we will elevate Colombo’s status as a leading transshipment hub. We are confident that the project will enhance global trade and connectivity in the region”, he said.

News

SLIC Life reports robust performance with Rs. 30.7 Billion PBT in 2024

Published

5 hours ago

2025/04/8

Sahan Weerasooriya

Nusith Kumaratunga (L) / Chandana L. Aluthgama (R)

Sri Lanka Insurance Corporation Life Limited (SLICLL) has concluded the year 2024 with outstanding financial performance, achieving a remarkable profit before taxation of Rs. 30.7 billion. The text of SLIC statement: “The company recorded a robust Gross Written Premium (GWP) of Rs. 26.3 billion, reflecting an impressive 25% growth. Remarkably, as of December 31, 2024, Sri Lanka Insurance Life marked a historic milestone with a New Business volume of Rs. 5.3 billion, recording a 48% growth, the highest in the company’s history.

Demonstrating its unwavering commitment to policyholders, Sri Lanka Insurance Life disbursed Rs. 13.7 billion in maturity settlements and claim payments in 2024, these figures reaffirm the company’s financial strength and dedication to fulfilling its obligations. Further cementing its position as a market leader, SLICLL continued to expand its asset base to an impressive Rs. 237 billion and grew its Life Fund to Rs. 213.2 billion. These achievements were realised amidst organizational transformations and challenging economic conditions. Additionally, the company recorded 319 MDRT qualifiers, the highest ever for SLIC Life.

Highlighting its prudent investment strategies and unwavering commitment to policyholders, Sri Lanka Insurance Life declared the largest Life Insurance bonus in the industry for 2023, amounting to Rs. 11.2 billion. Over the past two decades, the company has consistently delivered industry-leading bonus payouts, with cumulative declarations exceeding Rs. 104 billion. Continuing this legacy, Sri Lanka Insurance Life is set to declare its highest ever bonus for 2024, with official communication to be released in the near future.

Group Chief Executive Officer of Sri Lanka Insurance, Mr. Chandana L. Aluthgama, stated, “Our exceptional financial performance is a testament to the dedication and resilience of our team, who have navigated challenges with unwavering commitment. Despite economic fluctuations and internal transformations, our strategic focus has reinforced our market leadership. As we step into the future, we remain committed to innovation, customer trust, and industry leadership.”

Chairman of Sri Lanka Insurance, Mr. Nusith Kumaratunga, emphasized, “Sri Lanka Insurance Life has proven its strength and stability, delivering sustainable growth while reinforcing its role in the nation’s economic progress. Our vision extends beyond business success, we aim to contribute to national development by strengthening the economy and reducing dependency of the people on state support.”

Beyond financial success, Sri Lanka Insurance Life continued to earn industry recognition in 2024. The company was named ‘The Most Loved Life Insurance Brand’ by LMD for the seventh consecutive year and was ranked among the ‘Top 100 Most Valuable Brands’ in Sri Lanka by LMD Brand Finance. Additionally, SLIC Life secured top honors at the ‘Best Management Practices Company Awards 2024,’ ranking among the top ten companies and winning the ‘Insurance – Public Sector Company’ category.

Committed to international standards and operational excellence, Sri Lanka Insurance Life maintains ISO 9001:2015, ISO/IEC 27001:2013, and ISO 14064-1:2018 certifications. The company also continues its social impact initiatives, including the free Life Insurance cover gifted to parents of newborns on World Children’s Day for the third consecutive year, supported 1100 families in flood affected areas, providing emergency assistance to pilgrims traveling to Anuradhapura for Poson Poya and the awarding of 370 Suba Pathum scholarships to outstanding students in national examinations.

Looking ahead, Sri Lanka Insurance Life remains focused on driving innovation, enhancing customer confidence, and making meaningful contributions to society. With a solid foundation and a clear vision, the company is poised to maintain its legacy of excellence and leadership in the insurance industry.