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Don’t encourage EPF members to utilize holdings for current expenditure: CFL

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The Ceylon Federation of Labour (CFL) has lodged its objections with Labour Minister Nimal Siripala de Silva over the proposed ‘mild’ amendments to the EPF Act urging that the EPF, being the sole retirement benefit available to private sector “is best treated as a closed scheme and workers encouraged to avoid using moneys lying to their credit for current expenditure.”

CFL General Secretary TMM Rasooldeen in a letter to the minister has pointed out that the proposed amendment “cut across the original objective of the Act which was to provide a tax free benefit to individual members on retirement.”

We understand the reasons you mention for reviewing the pre-retirement benefits but we believe your proposal to completely unlock the Fund works against its very viability, he has said.

In 2010 when the then minister proposed that members be allowed to draw on their EPF balances for medical expenses, the CFL declined to support it “as it overlapped with medical facilities provided by the Employees Trust Fund (ETF) unnecessarily draining member balances available at retirement.”

They suggested instead that the ETF widens the scope of its medical benefits to include the EPF as well.

Rasooldeen said the proposed amendment seeks to allow members with Rs.300,000 or more contributions to their credit over a ten year period to withdraw up to 30% of it for undefined purposes. Saying the EPF as a retirement fund earlier permitted withdrawals for housing purposes considered an investment. But the track record of the EPF Housing Loan Scheme with its 40% default rate suggests even this to have been a failure.

“Since the fund balance of the member is offered as a guarantee to banks and released to cover defaults, it affects member balances in the long term. The CFL has always felt that the pressure to withdraw funds prior to retirement should be resisted by authorities,” he stressed.

“As an organization that stands for secure and strong social protection coverage for workers, we feel the proposed ‘open sesame’ amendment will render a death blow to its already fragile structure. We decline to support them as we are not convinced that they serve the best interests of member-owners of the EPF,” Rasooldeen said..

“Apart from the Parliament of Sri Lanka, it is the owner-members of EPF who have the right to suggest changes to the original objectives of the Fund. The EPF Act does not envisage a role for trade unions. Therefore, it is our firm belief that trade unions in the NLAC (National Labour Advisory Committee) are ill suited to decide on the matter.

“We suggest that a way be found to constructively engage the main stakeholders before effecting the proposed changes to which we object to. We trust you will no doubt appreciate that unions in the NLAC cannot act as proxies to the over 2.5 million who are the owners of the fund.”



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UNDP: Rs 600 bn tax cut a huge mistake

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Director of the Sustainable Finance Hub of the UNDP Marcos Neto has called the decision to do away with a range of taxes here a fundamental mistake committed by Sri Lanka.The comment was made at the Parliament complex during an interactive dialogue on ‘Revenue Generation as a Pathway to Sri Lanka’s Economic Recovery’ on Tuesday (09). It was organised on a request by Anura Priyadarshana Yapa, former Chairman of the Committee on Public Finance to the United Nations Development Programme (UNDP).

The Opposition as well as several other parties alleged that the government had lost as much as Rs 600 bn due to the controversial decision to do away with a range of taxes including PAYE, 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). 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.

The decision was taken at the first Cabinet meeting of the Gotabaya Rajapaksa government on 27 Nov. 2019.Governor of the Central Bank Dr. Nandalal Weerasinghe is on record as having said that the powers that be ignored the IMF warning not to do so and also the immediate need to restructure Sri Lanka’s debt (SF)

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Debate on power tariff hike on 29 Aug.

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Party leaders have decided to debate the electricity tariff hikes in parliament on 29 August.The date was fixed for the debate following a request by the main opposition SJB.The debate will be held from 9.30 am to 4.30 pm on 29 August.

Chief Opposition Whip Kandy District MP Lakshman Kiriella told Parliament on Wednesday (10) that as per the proposed tariff hike the monthly electricity bill of domestic consumers would increase by 75 percent to 125 percent. “This is unbearable. This is like sending the people to an electric chair while they are struggling to make ends meet amidst a massive increase in cost of living.

How does this government expect people would be able to pay such an exorbitant price for electricity? We demand a debate in parliament before this proposed tariff hike is implemented,” Kiriella said.

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British national to be deported

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By Rathindra Kuruwita

The Department of Immigration and Emigration has ordered Kayleigh Fraser, a British national whose passport has been taken into custody after she posted on social media anti-government protests, for violating her visa conditions, to leave the country by 15 August. The Department has already cancelled her visa.

Earlier this month Immigration and Emigration officials visited Fraser at her home and took her passport into custody. The Department said Fraser had been in Sri Lanka for medical reasons since 2019. She had returned home several times, it said.

The Immigration and Emigration officers told her to visit them within the next seven days.Fraser on 02 August said that a group of immigration officers had visited her and asked for her travel document. She said that officials told her that they would return her passport when she visited the Department of Immigration and Emigration.

Fraser added that she had received an anonymous call asking her to leave Sri Lanka as soon as possible before facing ‘big problems.’ Immigration officials visited her house a few days after the call.

Fraser has shared a number of photographs and videos from the ‘Gota Go Gama’ site. Human Rights groups and activists have accused the Sri Lankan government of using Emergency regulations to harass and arbitrarily detain activists seeking political reform and accountability for the country’s economic crisis.

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