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BR says only Prez, PM and Cabinet can make him reverse move

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Only listed companies targeted to raise Rs 114 bn

By Shamindra Ferdinando

Finance Minister Basil Rajapaksa has declared that his proposals to impose 25 percent retrospective tax surcharge on listed persons or companies that earned over Rs 2 bn 2020/2021 and increase VAT (Value Added Tax) to 18 percent from the current 15 percent wouldn’t be abandoned.

Appearing on ‘Salakuna,’ a weekly political programme telecast Monday night live on ‘Hiru’ FM Rajapaksa emphasised that he wouldn’t succumb to pressure from those affected by his proposals. Responding to ‘Hiru’ anchor Chamuditha Samarawickrema, the FM said only President Gotabaya Rajapaksa and Preme Minister Mahinda Rajapaksa and the Cabinet could intervene.

FM Rajapaksa said that he discussed the issue at hand with the chambers and didn’t object to the imposition of the surcharge for a year or two in view of the devastation caused by the pandemic, though they opposed haphazard changes in taxes.

However, those companies that hadn’t been listed in the Colombo Stock Exchange were left out of the tax net in spite of them, too, being cash rich, much to the surprise of the business sector.

Rajapaksa urged the media not to engage in a campaign to pressure the government to do away with the proposals.

Presenting the Budget for 2022, Minister Rajapaksa proposed (a) one-time tax surcharge of 25 percent on persons or companies with taxable income over Rupees 2,000 million for the year of assessment 2020/2021. The government expected to recover Rs 100 bn through this tax and (b) VAT on banks and financial service providers to be increased to 18 percent from 15 percent. Minister Rajapaksa stressed that this tax should be paid monthly from 01 January 2022 to 31 December 2022 and not passed onto customers. The government expected to raise Rs 14 bn through the tax.

When some Opposition members interrupted Minister Rajapaksa immediately after he announced the 25 percent surcharge on a selected group of companies, the FM said that he would like to see who represented the interests of the targeted companies.

The Inland Revenue Department says the following companies are likely to be levied proposed one-off tax surcharge: LOLC Holdings (Rs.23,075 mn), Commercial Bank (Rs 16,940 mn ), Ceylon Tobacco (Rs. 15,578 mn ), ExpoLanka Holdings (Rs. 14,830 mn), HNB (Rs 14,096 mn), Dialog Axiata (Rs. 12.034 mn), Ceylinco Insurance (Rs.8,880 mn), Sampath Bank (Rs.8,442 mn), Vallibel One (Rs. 8,117 mn), Sri Lanka Telecom (Rs.7,880), Hayleys (Rs.7,637 mn), Distilleries Company of Sri Lanka (Rs. 6,962 mn), LB Finnace (Rs. 6,807 mn), Royal Ceramics Lanka (Rs. 6,135 mn), Central Finance Company (Rs. 5,544 mn), Tokyo Cement Company (Lanka) (Rs.5,425 mn), People’s Leasing and Finance (Rs. 5,295 mn), Dipped Products (Rs.5,140 mn), National Development Bank (Rs. 5,117 mn), John Keells Holdings (Rs.5,026), Carson Cumberbatch (Rs.4,804 mn), Richard Pieris and Company (Rs. 4,680 mn), Melstacorp (Rs. 4,425 mn), LOLC Finnace (Rs.4,365 mn), Nations Trust Bank (Rs. 4,055 mn), Hemas Holdings (Rs. 3,621 mn), Bukit Darah (Rs. 3,541 mn), Cargills (Ceylon) (Rs.3,481 mn), CIC Holdings (Rs.3,132 mn), Haycarb (Rs. 3,047), SeylanBank (Rs. 3,039 mn), Lanka Walltiles (Rs. 2,960 mn), Nestle Lanka ( Rs.2,947 mn), DFCC Bank (Rs. 2,745), Ceylon Guardian Investment Trust (Rs. 2,721 mn), Citizens Development Business Finance (Rs.2,554), Lanka Tiles (Rs. 2,475 mn), Lion Brewery Ceylon (Rs.2,471 mn), Singer Sri Lanka (Rs.2,452 mn), Ceylon Cold Stores (Rs.2,334 mn), CT Holdings (Rs.2,288 mn), Chevron Lubricants Lanka (Rs.2,225 mn), Commercial Leasing and Finance (Rs. 2,216 mn), Access Engineering (Rs. 2,173 mn), Teejay Lanka (Rs.2,139 mn), Pan Asia Banking Corporation (Rs.2,048) and Commercial Credit and Finance (Rs, 2,005).

Former banker and Samagi Jana Balavegaya lawmaker Eran Wickremaratne strongly opposes the budget proposal. Asked for his stand on FM Basil Rajapaksa’s move and whether the latest proposal is similar to the tax imposed by the UNP but not implemented, MP Wickremaratne told The Island: “The private sector is not averse to paying taxes. They want a predictable tax environment so that they can plan and execute business plans. A one-off tax is arbitrary and unpredictable. It destroys business confidence. It weakens planning as well as foreign investors’ confidence in the country.”

Referring to the doing away with one-off super gains tax declared in 2015 but never implemented, SJB lawmaker Dr. Harsha de Silva stressed that two wrongs did not make a right.

Sources said that the cash strapped government could have targeted unlisted companies too. However, the decision makers had conveniently restricted the targeted group from among the listed group.

Responding to ‘Salakuna’ queries, Minister Rajapaksha strongly defended sharp tax cuts imposed immediately after the change of government in 2019. The minister said that sharp reduction of taxes saved many private companies, including the one that employed the ‘Salakuna’ team of journalists. The minister said so when Chamuditha Samarawickrema asserted that the government caused unnecessary revenue issues by reducing a range of taxes amounting to well over Rs. 500 bn.



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Collective Cabinet responsibility won’t be at country’s expense

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Udaya: We are ready to face consequences of revolting against backdoor Yugadanavi deal

By Shamindra Ferdinando

Energy Minister Udaya Gammanpila says that in spite of being members of the Cabinet, he along with National Freedom Front (NFF) leader Wimal Weerawansa and Democratic Left Front (DLF) leader Vasudeva Nanayakkara, have supported the petitions filed against the government entering into a framework agreement with US-based New Fortress Energy in respect of Yugadanavi Power Plant, etc., as they strongly felt that collective Cabinet responsibility should not be at the expense of national security.

Pivithuru Hela Urumaya (PHU) leader and Attorney-at-Law Gammanpila emphasised they had challenged the Cabinet over the controversial agreement following careful examination of what he called a politically charged situation.

The Colombo District MP said that they were ready to face the consequences of legal measures they had resorted to. Minister Gammanpila said so in response to The Island query whether they could continue as members of the Cabinet after having objected to an international agreement, finalised by the government.

Gammanpila said that they had never tried to hide their intentions and they felt embarrassed by the way some in the government manipulated the very process that was meant to ensure transparency and accountability.

Treasury Secretary S.R. Attygalle, on behalf of the government, entered into an agreement with New Fortress Energy, a company listed in the NASDAQ, on July 7, 2021, two days after Cabinet decided on the matter.

Gammanpila said they had tried to settle the issue at the Cabinet level and at the government parliamentary group. “Finally, we were left with no alternative but to denounce the New

Fortress deal and then throw our weight behind those who moved the Supreme Court against it,” Minister Gammanpila said.
The SLPP repeatedly demanded that whatever the issue the constituents should settle it within the government parliamentary group and the Cabinet.
Minister Weerawansa told Parliament on 11 November that an Attorney-at-Law would represent the trio at the Supreme Court proceedings.
Responding to another query, Minister Gammanpila questioned the rationale behind bringing in a company that hadn’t been involved in the tender process in respect of a high profile project involving the West Coast Power Limited (WCPL). The minister said that the US firm had spurned the tender process as it received an assurance as regards the contract.

The US government pushed for the deal meant to secure 40 percent shares of the WCPL at a cost of USD 250 mn, Minister Gammanpila said.
The Cabinet memorandum as regards the sale of WCPL shares, in addition to the floating storage regasification unit, mooring system and the pipelines and the supply of LNG (Liquefied Natural Gas) is dated 06 Sept., 2021, months after Sri Lanka entered into FA with New Fortress Energy.

Asked whether the NFF, PHU and DLF would receive the support of other parties including the SLFP, Minister Gammanpila said that those who had pledged support for their cause remained committed and confident.

In addition to the NFF, PHU and DLF with a combined strength of eight MPs, the grouping against the New Fortress deal included the SLFP (14 members), CP (1 MP), Yuthukama (2 members) and Tiran Alles. Over two dozen elected and appointed members of the SLPP are against the New Fortress deal.

Of the smaller constituents in the government, the MEP (Mahajana Eksath Peramuna) has distanced itself from the campaign against the energy deal.
Minister Gammanpila said that in his current capacity as the energy minister he had been compelled to struggle against the energy project as it posed a threat to the country. Referring to the then President Ranasinghe Premadasa sacking ministers, Lalith Athulathmudali, Gamini Dissanayaka and G.M. Premachandra in 1991, Minister Gammanpila said that the UNPers sought the Supreme Court intervention. The SC ruled that in case ministers had been deprived of an opportunity to discuss some matter at the cabinet, they could do so with the public, Gammanpila said, adding that they pursued a strategy based on that SC position.

Minister Gammanpila said that Sri Lanka couldn’t afford to create a foreign monopoly in the gas supply to the country. The situation would be far worse as the proposed monopoly would be American, Gammanpila said, noting that in spite of entering into a spate of other agreements with foreign partners under controversial circumstances, the incumbent government seemed to have perpetrated an unpardonable act.

Minister Gammanpila said that the US energy deal would deliver a knockout blow to Sri Lanka’s efforts to tap gas in the Mannar seas. The consequence of this arrangement would be far reaching and devastating as far as Sri Lanka was concerned, the minister said. If the New Fortress deal was carried pit. Sri Lanka wouldn’t be able to bring in other investors to extract gas from the Mannar basin, the minister said.

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State and private sector union members on sick leave demanding Rs 10,000 pay hike

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Protesting workers blocking the entrance to the Presidential Secretariat yesterday morning (pic by Nishan S. Priyantha)

Members of several state, semi-government and private sector trade unions took sick leave yesterday (08) as part of their trade union struggle to win a number of demands including a 10,000-rupee pay hike and the cancellation of the questionable New Fortresss deal.

Unions of the Ceylon Petroleum Corporation (CPC), the Ports Authority and Ceylon Electricity Board (CEB) have pledged solidarity with the protesting workers.
The unions held demonstrations near the Parliament Roundabout and the Fort Railway Station.

They opposed the government decision to raise the retirement age to 65.
“There are over 25,000 postal workers and about 80% of them have joined the union action. This is the case in other sectors too,” President of Sri Lanka Postal Services Union Chinthaka Bandara said.

He demanded that the government increase their salaries through the budget 2022. “Otherwise, we will resort to sterner trade union action. The cost of living has gone through the roof and the Central Bank has admitted that inflation has risen sharply. Most companies in the private sector have reduced the salaries of employees and the allowances in the government sector too have been slashed. People will have to starve at this rate, “Bandara said. (RK)

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Contaminated fertiliser: Case to be taken up on May 09

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By Ifham Nizam and Chitra Weerarathne

The Centre for Environmental Justice (CEJ)’s lawsuit to stop unloading here of allegedly contaminated organic fertiliser, CA WRIT 476/2 was taken up yesterday before Court of Appeal Justices Achala Wengappuli and Dhammika Ganepola.

Taking the facts into account the Court ordered that the case be recalled on May 9, 2021.

At a previous hearing the court questioned the Attorney General whether the Government was in a position to assure that they would not allow the controversial load of fertiliser to be unloaded. In response to that request Deputy Solicitor General Nirmalan Wigneswaran, who appeared on behalf of the Minister of Agriculture informed the Court yesterday that the vessel carrying the controversial fertilizer belonging to the Chinese company has left Sri Lankan maritime space.

Senior Counsel Ravindranath Dabare, Ms Nilmal Wickramasinghe (AAL) and Ms Thushini Jayasekara (AAL) appeared for the petitioners on the instructions of Ms. Samadhi Hansani Premasiri (AAL).

In the petition. CEJ argued that organic fertiliser from any country could not be imported into Sri Lanka, under any circumstance, according to the regulations of the Plant Protection Ordinance imposed in 1981 and Plant Protection Act No. 35 of 1999 as it prohibit the import of soil particles, living organisms, any virus, bacteria or fungus cultures into the country, given that organic manure/compost is made of decomposing animal and plant parts, which could consist of pathogens.
However, when the samples collected from this controversial shipment were tested Sri Lankan authorities found harmful organisms. As a result, National Plant Quarantine Service did not issue any import permit particularly for this bulk stock of so called “Organic Fertilizer”, the petitioner pointed out.

It also said that based on those facts the Director General of Agriculture had issued a letter dated 22.10.2021, addressing the Chairman, Sri Lanka Port Authority, requesting him to prevent the berth of the vessel carrying this stock of Fertilizer at the Colombo Port and not to discharge any of its organic fertilizer into the Sri Lankan territory claiming it carried a huge phytosanitary risk to Sri Lanka.

In addition to this Ceylon Fertilizer Company also obtained an enjoining order (on 22.10.2021) from the Commercial High Court of Colombo against Qingdao Seawin Biotech Group Co. Ltd; the supplier and the People’s Bank, preventing the latter from making any payment under the Letter of Credit opened in favour of Qingdao Seawin Biotech Group Co. Ltd which has entered into a contract with Ceylon Fertilizer Company.

However, in spite of all these Qingdao Seawin Biotech Group Co. Ltd officially informed The Director General of Agriculture that its consignment of fertilizer which was shipped from China on 29th September 2021 would reach Sri Lanka as scheduled.

The Center for Environmental Justice therefore had to file an urgent motion CA WRIT 476/21 on (25.10.2021) to prevent the stock of fertilizer from entering the country owing to political or public pressure.

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