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Budget has no solutions for deepening FOREX and economic crisis – Eran



Former State minister of Finance Eran Wickramaratne says the budget- 2022 presented by the Minister of Finance Basil Rajapaksa has an unrealistic dream of 8.8 % deficit as per their own estimation. However according to Fiscal Responsibility Act of 2003 the budget deficit cannot exceed 5 % of the GDP.

“As the responsible Opposition in parliament we cannot agree with the government seeking parliamentary approval for a budget proposals that violates the provisions of the Fiscal Responsibility Act of 2003,” said Opposition MP Wickramaratne speaking in the budget debate on its second reading stage.

“This is illegal. Are you asking the supreme legislature of the country, which makes these laws, to permit you to violate these laws? Do you mean to violate the law and sovereignty of the people and expect us to raise our hands in favour of this breach of law?” asked MP Wickramaratne

Speaking further he said that, when looking at the budget it is evident that the government has presented bloated statistics and overestimations of its unrealistic dreams. This government is going in reverse. The government had estimated revenue for 2021 at 2029 billion rupees, but it has estimated receipt of only 1561 billion rupees with a shortfall of 500 billion. Today, government revenue for 2022 is projected to be 2284 billion rupees. Does that mean that the revenue will be increased by around 45 % to Rs 800 billion within a year? Increasing it by a maximum of 10% or 12% would be more realistic. This government is constantly in the habit of lying and deceiving this House and the people. So naturally, this is a daydream presented as a revenue forecast.

When we came to power in 2014, government tax revenue as a percentage of GDP was 10% and we systematically increased it to 13%; it was methodically planned and implemented. Here we remember the former Finance Minister late Mangala Samaraweera who guided plans to increase government revenue. We had a vision and a programme for the development of the country via increasing the state revenue and the budgets we presented reflected this.

Before this government came to power there was a lie that they propagated. That is, that our government taxed everything and ran on taxes. The person who concocted these so-called slogans for Gotabhaya Rajapaksa’s 2019 campaign was, Basil Rajapaksa, his campaign manager.

I would like to next focus on increasing government revenue. There is an attempt to increase revenue through taxes in the budget for 2022. The budget has proposed a levy of a one-time 25% surcharge tax on companies or individuals who had a taxable income of over Rs 2,000 million in the years 2020/2021 while increasing the VAT from 15 % to 18 % for the banks and the financial services. In addition to VAT there is a proposal to introduce new GST and a Social Security Tax as well. Instead of one turnover tax, there will now be multiple turnover taxes.

These taxes will burden Small and Medium Enterprises too. Shouldn’t medium-sized businesses be encouraged to expand? Is this the manufacturing economy they envisaged? This is indeed a great tragedy. The problem is not really with levying of taxes. To protect social justice taxes must be levied systematically. There is no dispute about that. But there must be a consistent tax policy. In 23 years Sri Lanka amended VAT 11 times, and in contrast New Zealand in 23 years has revised it only twice. One off taxes are arbitrary and disturb private sector business plans. When those who do not know anything about managing an economy implement complicated tax structures, no investors will come to Sri Lanka. The private sector requires a predictable and consistent tax policies.

He also said that under the present economic and governing context only the Rajapaksa family and their cronies have the opportunity to carry out all kind of businesses. We are not surprised by this. Further, Wickramaratne recounted that the Mahinda Rajapaksa administration took over the airline in 2008 from Emirates Airlines investors, triggered by an incident where the presidential entourage were denied seats on a Commercial Flight. The airline had accumulated a loss of over 250 billion rupees just between 2008 and 2021. Who is bearing these costs? Innocent people who have never set a foot on a plane are the ones who are paying for this. When investors reflect on the manner in which emirates was treated, they will have reservations about Sri Lanka’s investment climate. In this context, Port City is also a dream which we have to tread carefully.

Not every investor resorts to means like paying commissions to establish businesses. In general, investors need confidence and trust in the host country. To this end we must have a friendly foreign policy and ensure the rule of law prevails and guarantee human rights. Investors are concerned about the protection of human rights and the way the country treats local businessmen. Moreover, these values have no place in this government’s overall policies.

All wrongs will end. We urge the government not to mislead the people through racist and divisive propaganda. Our foreign policy is extremely weak, as is the state of human rights. The risk of losing the export market opportunities has re-emerged. The European GSP plus concession and the American GSP concession are very important to us. Europe, America and the Middle East in particular are the largest segments of our export market. It is through this that the country gets dollar revenue. I urge the government not to jeopardize these avenues of revenue further. When the Rajapaksa regime in 2014 cost the country the GSP plus concession, our government got it back with great difficulty. If our export market shrinks further, the economic catastrophe that will befall this country will not be insignificant.

The budget proposed that 70% our energy requirement would renewable energy, but there are no provisions to support the policy. The compensation promised to be paid to those who incurred losses due to organic farming is another empty promise as there are no provision budgeted to meet this. Defense expenditures have been increased while education and health allocations have suffered. Health allocation was 255 billion and was increased to 301 billion in 2021. Despite being in a pandemic, the allocation for health in the 2022 budget is 234 billion, a drop of 67 billion from last year. 52% of the country’s population are women, and yet there has been no focus on increasing female labour force participation, allocations for maternity leave, equal pay and other issues that discriminate against women. Women issues not being represented at cabinet level is reflected in this budget.

Alarmingly but not surprisingly, about 2/3rds of the budget allocations are in the control of the members of the Rajapaksa family. Yesterday, November 16th, the whole country witnessed large scale protests.

“The application of “one country, one law” towards the government and opposition is in contrast. Our people are facing unprecedented economic hardships which may worsen in 2022. This is a blessed country. Despite the present misfortunes that the current government has heaped on us, we are ready to take up the challenge and responsibility of building this country for future generations, with the right vision, policies and a competent team,” MP Wickramaratne said.

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Sri Lanka Tourism commands attention at World Routes 2021



Sri Lanka made a huge splash at the 26th World Route Development Forum (World Routes 2021), which took place in Milan, Italy, recently. By making its presence felt at the forum, Sri Lanka pitched its destination for global airlines to consider it as one of the top holiday destinations for the upcoming winter season and beyond. Sri Lanka Tourism officials were able to directly engage with decision-makers from the global route development community, including world’s air services, while taking advantage of dedicated in-person and virtual event days combining extensive meeting opportunities, exclusive industry insight and first-class networking opportunities.

The Chairperson of Sri Lanka Tourism, Ms. Kimarli Fernando, expertly leveraged on the platform provided by World Routes 2021 to highlight Sri Lanka’s 5-year global campaign and growth potential. Her keynote presentation was followed by a panel discussion and a Q&A session with attendees in collaboration with Major General (Rtd.), G.A Chandrasiri , Chairman, Airport and Aviation Services. Through the duration of the Forum, Sri Lanka Tourism was present on all social media platforms for driving brand awareness, pushing Destination Sri Lanka to the front and centre of global travel and tourism operators present.

With the Sri Lankan Government declaring this a growth decade, Sri Lanka Tourism has been aligned to the government’s vision as enshrined in the 10 pillar strategy document. Over the last two years, Sri Lanka Tourism has advanced the industry across various factors to bring prosperity to all stakeholders and to ensure Sri Lanka tourism fulfills its potential. Concurrently, with a high vaccination rate, Sri Lanka has opened up to fully vaccinated tourists, offering them a safe and exciting stay.

One of the key pillars has been connectivity and the efforts made have been fruitful – with several European and regional airlines resuming direct flights, new routes being established and increased frequency of flights to Sri Lanka which will boost tourism for the upcoming peak season.

Apart from elaborating on the strategy, Kimarli Fernando engaged in an absorbing Q&A session with global airline industry stakeholders. During her keynote speech she elaborated on Sri Lanka’s biodiversity, UNESCO sites and other cultural and nature offerings. One of the highlights of her speech was tourist investment. Tourism has been attracting substantial investment despite the challenges emanating from the pandemic. Between March 2020 – June 2021, the Government of Sri Lanka has attracted over US$950 million in investments, received 64 project proposals and approved 38 projects to the value of $102.38 Million. These ventures will be executed under the Sri Lanka Tourism Development Authority (SLTDA). In order to attract strategic investors, the Investor Relations Unit was launched as a single point of contact for all tourism investments. In addition, the Government of Sri Lanka is extending a host of financial incentives and fast-track processes to get projects off the ground within the shortest possible time.

Given the recent tie-ups with France tourism operators and a similar push in more key western markets, the brand awareness of Sri Lanka is growing in strategic markets.

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ComBank wins Daraz award for ‘Best Engaging Overall Cards Base’



The Commercial Bank of Ceylon was presented the award for ‘The Best Engaging Overall Cards Base’ at the recent ‘Payment Partner Performance Awards 2021’ of Daraz, South Asia’s premier online shopping marketplace.

The Bank was awarded this title for empowering the Daraz platform by generating the highest number of transactions by both credit and debit card bases and the highest number of unique buyers’ engagement during the financial year 2020-21. This is the second consecutive year that the Bank was honoured with this award.

The Commercial Bank of Ceylon has been an Internet Payment (IPG) service provider to Daraz from 2018, and has since partnered with the online retailer to power ‘Daraz 11.11,’ the world’s biggest online sale.

The two organisations are working together to offer diversified and unique offers to customers with a view of offering them attractive value additions, the Bank said. Commercial Bank cardholders can enjoy periodic discounts at Daraz with the offers structured by the Bank, and the convenience of Easy Payment Plans of up to 60 months.

Launched in 2012, the Daraz eCommerce site has an active presence in Pakistan, Bangladesh, Sri Lanka, Myanmar, and Nepal. The marketplace has over 2.5 million products in diverse categories such as consumer electronics, household goods, beauty, fashion, sports equipment, and groceries. It was acquired by the Alibaba Group in 2018.

Commercial Bank Credit and Debit Cards offer year-round promotions covering a wide variety of services. Commercial Bank was the first bank to offer loyalty rewards for both Credit and Debit Card holders under its Max Loyalty Rewards Points scheme. The Bank was also a pioneer in extending promotional discount offers which were traditionally only offered for Credit Cards to its Debit Cards.

Commercial Bank cards are the fastest growing cards in Sri Lanka and enjoy market leadership in Credit and Debit Card cumulative point-of-sale usage. The Bank offers a variety of Credit Cards in the Silver, Gold and Platinum tiers of Visa, Mastercard and UnionPay Cards, as well as Visa Signature, World Mastercard, Visa Infinite, UnionPay Asia Prestige Platinum and UnionPay Asia Prestige Diamond Cards in the premium segment. The cards are equipped with ‘Tap ’n Go’ NFC technology and are backed by a strong NFC Point-of-Sale (POS) network.

Sri Lanka’s first 100% carbon neutral bank, the first Sri Lankan bank to be listed among the Top 1000 Banks of the World and the only Sri Lankan bank to be so listed for 11 years consecutively, Commercial Bank operates a network of 268 branches and 931 automated machines in Sri Lanka. Commercial Bank is the largest lender to Sri Lanka’s SME sector and is a leader in digital innovation in the country’s Banking sector. The Bank’s overseas operations encompass Bangladesh, where the Bank operates 19 outlets; Myanmar, where it has a Microfinance company in Nay Pyi Taw; and the Maldives, where the Bank has a fully-fledged Tier I Bank with a majority stake.

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Banks’ Chief Internal Auditors’ Forum appoints new committee for 2021/22



Seated from left - Varuna Koggalage (Committee Member), Numair Cassim (Vice President), Charitha Jayawickrama (President), Nirosha Perera (Secretary), Dulan Abeyratne (Committee Member) Standing from left - Dhanjaya Dayananda (Committee Member), Chandima Samarasinghe (Outgoing Secretary), John Premanath (Outgoing Vice President), Maduwantha Liyanage (Immediate Past President/Committee Member), Jayan Fernando (Committee Member). Absent from picture - Committee Members Kushlaini Allis and Gamini Jayaweera

The Chief Internal Auditors’ Forum of Banks appointed its 5th committee recently. The inaugural committee meeting was held on 17th November 2021 subsequent to the AGM held on 3rd November 2021. Charitha Jawawickrama of Sampath Bank was appointed as the President, Numair Cassim (Amana Bank) as Vice President and Nirosha Perera (Union Bank) as Secretary. Others in the committee include Varuna Koggalage (Seylan Bank), Dulan Abeyratne (HSBC), Dhanjaya Dayananda (SDB), Jayan Fernando (DFCC), Kushlaini Allis (NTB) and Gamini Jayaweera (NSB). The outgoing committee included Maduwantha Liyanage of BOC (Immediate Past President), John Premanath (Commercial Bank) and Chandima Samarasinghe (Cargills Bank).

The Forum was established to build strong relationships amongst the Licensed Commercial Banks and Licensed Specialized Banks in dealing with new developments and challenges pertinent to the industry. It also supports Internal Audit professionals to enhance comradeship and encourages participation of Banks to share knowledge and industry best practices. Since re-establishing in 2015, the forum has become an integral body that supports and assists Banks with regard to common audit related concerns in the industry.

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