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Five-year income tax exemptions for agriculture, livestock, and fisheries sectors

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Budget for next year presented under COVID siege

* Special Tax Appeals Court to resolve tax issues expeditiously

* Rs 500,000 start-up capital loan with 5-year grace period for entrepreneurs

* A sports economy worth USD 1,000 Mn from 2021-2024

* New city universities in each district

* Rs 8 Bn for technology enhancement

* Rs. 250 mn to develop temples in villages

* Extra Rs. 2 per dollar sent by Lankans employed overseas

* Two LNG plants, one coal plant to produce 1,000MW

* Sustainable and renewable energy supply by 2023

* Rs.15 billion for expanding mobile, fixed broadband

* An additional provision of Rs. 20,000 mn for the tri-forces

* Allocation of Rs 750 mn for activities of Rana Viru Seva Authority

* 5.5% economic growth rate for 2021 expected

* 4% budget deficit goal to be achieved by 2025

 

By Saman Indrajith

Prime Minister Mahinda Rajapaksa in his capacity as the Minister of Finance presented the 75th budget of the country, spelling out measures and proposals to achieve poverty alleviation and economic revival.

The budget proposals aimed to support the two year medium term programme of poverty alleviation and economic revival outlined for 2021-2023 in the “Vistas of Prosperity and Splendour’, the Prime Minister said.

“The expected economic growth rate for 2021 is 5.5 percent. I emphasise that it is our medium term vision to reduce the budget gap through increasing the economic growth up to 6% and increasing the government revenue from its current level of 9.7% to 14.1%. By 2025, the budget deficit is expected to be 4% of the GDP due to growth in tax revenue through the expansion of the economy and the trust placed on the management of public expenditure and public enterprises.”

Prime MinisterRajapaksa commenced delivering the budget speech around 1.44 pm. It continued till 4.54 pm including a half-an-hour tea break between 2.43 to 3.24.

Income tax exemptions have been proposed for agriculture, livestock, and fisheries sectors for five years. In addition, a 50% income tax exemption has been proposed for local companies if get listed in the Stock Market before December 31, 2021.

He proposed to establish a special Tax Appeals Court to facilitate the resolution of tax appeals without delays, Prime Minister Rajapaksa said.

“I propose to simplify the Taxes on Capital Gains, where such taxes will be calculated based on the sale price of a property or the assessed value of a property whichever is higher. I propose to exempt the tax on dividends of foreign companies for three years if such dividends are reinvested on expansion of their businesses or in the money or stock market or in Sri Lanka International sovereign bonds.”

The PM also noted that the government intended to bring necessary changes to the Inland Revenue Department (IRD) in order to increase the self-compliance of taxpayers and to strengthen tax audits as well as to increase tax revenues.

The Premier went to propose enforcing necessary legal provisions that enabled the cancellation of private tax consulting services that aid and abet issuance of forged tax reports.

A loan of Rs 500,000 as start-up capital with a grace period of five years would be introduced for entrepreneurs. A commitment fee of 0.25 per cent proposed to be levied from loan applicants to ensure that the funds are managed and utilized accordingly.

Prime Minister Rajapaksa proposed to allocate additional funds of Rs. 3,000 million to initiate a scholarship programme to provide Rs. 4,000 monthly allowance each to students receiving vocational education based on their active participation.

Technical colleges of which the annual intake is presently at 100,000 would be increased to 200,000 students per year, he said. A five-year-grace period for tax levied from Vocational Training Centres, which were able to double their annual intake of students, was proposed. Rs. 10,000 million would be allocated from the budget next year for new technical colleges to be established in Colombo, Kalutara, Kandy, Anuradhapura and Batticaloa. New city universities would be established in each district to cater to students pursuing popular subjects.

The PM proposed to create a sports economy worth USD 1,000 million during the period 2021-2024. For that purpose Rs 1000 million was proposed to be allocated from the budget. He proposed measures to increase female participation in national sports.

It was proposed to increase production of milk to meet local demand and a Rs. 500,000 loan will be provided for purchasing cows and meeting other dairy farm requirements. The Premier said that $300 million in foreign exchange was annually needed for milk imports and proposed to reduce that by $55 million by encouraging local milk production.

Prime Minister Rajapaksa proposed to allocate Rs. 750 million for the welfare of disabled armed forces personnel.

He proposed to allocate additional funds of Rs. 250 million to develop basic infrastructure of temples in rural areas.

The Budget proposes to allocate Rs. 8 billion for technology enhancement next year. In addition, allocation of Rs.15 billion for expanding mobile, fixed broadband under the “Gamata Saniwedanaya’ scheme was proposed. State land would be given to the Telecommunications Regulatory Commission for the proposal, the PM said.

The Prime Minister said that low-income women migrated for work and their remittances had strengthened the national economy. In a bid to increase annual remittances from migrant workers to over US$ 7 billion, he proposed to pay extra two rupees for every dollar sent by Lankans employed overseas. That was in addition to prevailing exchange rates; he said, assuring to implement a contributory pension scheme for Lankan foreign employees.

It was proposed to expedite the construction of the national expressway network and extend the Marine Drive to Moratuwa. Prime Minister Rajapaksa said a three-year programme to develop road infrastructure in the 25 districts would be introduced. Rs 1,300 million proposed to be allocated to improve the railway network including the extending of Colombo and Kelani Valley track.

Electricity consumers were assured of a sustainable and renewable energy supply by 2023.

The PM said that 70 per cent of the country’s energy supply would be obtained from renewable energy sources by 2023. The Lakvijaya and Kerawalapitiya Power Plants would be strengthened to guarantee interruption-free power supply through years 2021-2022. One coal-fired power plant of 300 MW and two LNG plants would set up. The Kerawalapitiya plant would be transformed into an LNG plant, the PM said, proposing to provide solar panels of 5 kilo watts each to 100,000 houses of low income families under an Asian Development Bank and Indian loan scheme. Loan of 4% interest rate would be provided to low income families for this purpose, he said.

Reforms were proposed for the Foreign Service and under the new reforms bilateral agreements would be reviewed to ensure national security and Sri Lanka’s non-aligned stance, the Prime Minister said, adding that under those reforms a new mechanism would be introduced to assess the efficiency and effectiveness of diplomats and foreign service officers.

“With the aim of ensuring national security, a medium term plan to enhance the professional skills of the heroes of our tri-forces, providing them with modern technological facilities is currently being prepared. In the context of resource constraints and identified priorities in the country, further strengthening of the Sri Lanka Navy has been given priority. We must combat the drug menace and must eliminate it to prevent our country becoming a hub for international illicit drug trade. The government expects to ensure that the investments will facilitate to control smuggling of goods, providing the required protection for the fishery resources and fishery communities and establishing a safe environment for carrying out tasks in the Indian Ocean.”

The PM proposed to allocate Rs. 20,000 million as an additional provision for the tri-forces to fulfill the basic requirements identified in the medium-term and long-term planning frameworks in accordance with their basic requirements.

He also proposed to allocate Rs.750 million for the activities implemented by the RanaViru Seva Authority, including the provision of medical aid, support for development enterprises, conducting of educational and vocational development programmes, housing loans and provision of supporting equipment for the disabled war heroes targeting, the retired and disabled war heroes of the tri forces, police and the civil defense force and the dependents of the families of those heroes have laid down their lives.

The Premier proposed an additional allocation of Rs. 2,500 million, to address special programmes aimed at strengthening public security. “The government has given special attention to strengthening the police so as to assure public security. We must consolidate the environment for all citizens to live freely without any fear. Resources will be allocated to support the control of the drug menace, to regulate vehicles and traffic rules, strengthening Tourist police, special training and provide the necessary facilities to prevent crimes and robberies. It is also proposed to expand the police patrols to ensure public safety by deploying special police vehicles.”

Prime Minister Rajapaksa proposed the implementation of a special loan scheme for public servants to obtain solar powered electricity. “When appointing or transferring public servants, it is proposed to ensure that such postings are made giving preference to the districts of residence. Permission will be granted for non-executive office employees of the public service to engage in other jobs or employment after office hours and those who seek foreign employment will be granted leave for two years. I propose to reduce the maximum interest charged on housing and property loans of public servants granted by banks under housing loans and advances up to a maximum of 7 per cent.”

The PM said: “The estimated Government Revenue for 2021 is Rs. 1,961 billion. The total Government expenditure is Rs. 3,525 billion and as such the difference between the revenue and the expenditure is Rs. 1,564 billion. It is planned to maintain the budget gap at 9 percent of the GDP since the private investments which amounted to 32.3 percent of the GDP in 2014 has decreased up to 27.6 percent in 2019 and since it is required to provide a robust start by the government to revive the economic growth which had stagnated recently.”

The second reading debate of the budget is scheduled to commence today (18) and continue till Nov 21. The vote on the second reading will take place at 5 pm on Nov 21. Parliament sittings will be held from the 18th to the 20th from 9.30 am to 5.30 pm. The debate of the Committee Stage will commence on Nov 23 and is scheduled to conclude on Dec 10. The final vote on the budget is scheduled to be taken at 5.00 pm on Dec 10.



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Dhammika asks Ranil to resign as FM

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By Rathindra Kuruwita

Minister of Investment Promotion, Dhammika Perera, yesterday told the media, in Colombo, that Prime Minister Ranil Wickremesinghe had to resign from his post as Finance Minister.

Minister Perera said that the Prime Minister was blocking all dollar earnings, borrowings, bridging finance, available essential food credit lines and other credit lines.

“I am joining the Aragalaya from today. I have been in the government for seven days. I have seen what happens. The Prime Minister must stop his political game as the Minister of Finance,” he said.

Perera added that Wickremesinghe had no plan to boost the cash flow, about feeding people, or bringing in dollars.

The Minister of Investment Promotion said that instead of describing the people’s economic woes, the Finance Ministry had to find solutions.

“For example, the proposal to give investors 10-year multiple visas was finalised some time ago. One month has since elapsed, but the Treasury is sitting on it. This is because Ranil is in the habit of stopping projects if they bring in dollars. More than 50 people have come to get the visa by paying 100,000 USD.

About 300 more are on the list. We can bring in 30 million dollars to Sri Lanka, this month, with the help of this visa scheme. Sri Lanka’s Finance Minister is inviting disaster,” Minister Perera said.

Perera added that while Wickremesinghe could continue as the Prime Minister, but as the Finance Minister, the latter had no desire to resolve the foreign currency crisis. All of Sri Lanka’s economic woes are linked to the dollar shortage, he said.

“I challenge Ranil and his economic experts to an open media debate. Maybe he can answer my questions. I challenged him to a debate in 2019, and he ran away. I am challenging him again,” Minister Perera said.

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JVP Leader accuses govt. of hatching plot against his party

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By Saman Indrajith

JVP leader Anura Kumara Dissanayake yesterday said that the government was planning to suppress his party by levelling false allegations against the latter.

Addressing the media at the party headquarters, Pelawatte, Dissanayake said that the plot hatched by the government could lead to bloodshed.

“A video has been released, on social media, instructing how to make Molotov Cocktails. The voice, in the footage, instructs the viewer to make bombs in a similar manner, and tie them to their bodies and explode themselves at the President’s House. The video says that after the explosion I would be appointed the President. Anyone would know that the JVP would not do anything stupid like that. This video is another attempt by the government to justify the use of violence against its critics. There have been similar instances in the past and this country has suffered heavily as a result,” Dissanayake said.

He said that his party lawyers would submit the video to the CID and demand an investigation from the police on who had created and uploaded it to social media. “There is a massive protest to be held in Colombo centering the Galle Face Aragalaya.

“We, too, will participate in it. The government’s response to the protests is to use the police and the army. In addition there are several other developments, including the creation of a para-military force against us. Each SLPP MP is given a chance to recruit five persons, loyal to him or her, as home guards to provide security to the MP. There was a letter from the IGP to Defence Secretary warning of possible bomb attacks. Our party’s name is there in that warning. I have queried this letter in Parliament, too, yet there is no explanation yet. It is in the same context some MPs have requested for personal firearms from the Defence Ministry. Taken together, these developments could indicate the plans of government suppression and what is there in store for us. We do not think that they could fool the people with these tricks. The CID is capable of investigating and finding the sources of any video against the President, in social media, within 24 hours. So we expect the same expedient action would be taken with regard to our complaint, too,” Dissanayake said.

He said that the JVP was prepared to stabilize the country and help bring it out of the current crisis in a short period of time.

Dissanayake said the JVP does not intend to do it alone and was confident that the citizens of the country, and Lankans overseas, would extend their support to the party for this purpose.

“This crisis cannot be resolved by changing posts or individuals, and especially not through a government that has lost the trust of the people,” he added.

When inquired about Prime Minister Ranil Wickremesinghe’s statement in Parliament on his willingness to step down to allow Dissanayake to implement his economic plans, the MP said he was prepared to take up the task.

He said, however, that the President and Prime Minister must resign if he were to take up the challenge and implement JVP’s programme to save the country from the crisis.

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Move to set-up smoke-free zones: PHI union says member engaged in project harassed; Ministry says action in line with establishment code

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by Ifham Nizam

Public Health Inspectors’ Union has accused a section of the Health Ministry officials of working against a project to establish smoke-free zones in Sri Lanka.

The union alleged that a PHI who served the anti-tobacco campaign and went to the extent of sacrificing his personal leave for the same had been denied annual increments.

It said that the National Authority on Tobacco and Alcohol (NATA) organised a project, under the auspices of the World Health Organization (WHO), to set up at least one smoke-free zone in each Medical Officer of Health Division countrywide. The union said that it played a significant role in the project.

The union alleged that PHI T. G. S. L. Prakash, of the Principal Public Health Inspectors’ Unit of the Ministry of Health, had been invited as a resource person as he innovated a 10-step process for establishing smoke-free zones for combatting second hand smoke.

However, the Deputy Director General (Public Health Services) of the Ministry of Health Dr. S. M. Arnold had obstructed the project by blocking Prakash’s participation, the union alleged.

Responding to The Island queries, Dr. S. M. Arnold said that he acted in terms of the Establishment Code and recommendations made by the relevant committee. Dr. Arnold said that the PHI concerned applied for leave for his PhD on Elephant Ecology study overseas, and work-related to NATA did not come under their purview. Dr. Arnold pointed out that the PHI Union President was also working for NATA.

Public Health Inspectors’ Union, President. Upul Rohana has previously asked the Health Secretary to conduct an investigation into the conduct of Dr. S. M. Arnold. According to the union for more than five years, PHI Prakash has conducted various research on the establishment of smoke-free zones in collaboration with NATA and the WHO and published and presented the research results at local and international fora.

The union said that the Chairman of NATA had requested that PHI Prakash to participate in the project as the outfit could benefit from his experience and expertise he had gained overseas in tobacco prevention.

The union claimed that the PHI concerned had participated in the project utilising his personal leave. The union alleged that Dr. Arnold had said that he wouldn’t recommend the annual salary increment for the particular PHI Prakash as his attendance was unsatisfactory.

PHI Chief Rohana emphasised that the concerned Deputy Director General continued to harass the officers who volunteered for their duties, abusing the power of his positio. He said although the union had complained to the health authorities, no action has been taken in that regard so far and their union would not hesitate to resort to trade union action seeking justice.

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