News
JAAF opposes govt. move to abolish SVATs

questions timing, given current decline in exports
urges govt. to shield sector from unnecessary internal shocks
The Joint Apparel Association Forum (JAAF) has expressed its deep concerns and disappointment regarding a recent government decision to end the well-functioning Simplified Value Added Tax (SVAT) scheme.
Cabinet spokesman Minister Bandula Gunawardena last week disclosed that the Cabinet-of-Ministers approved a proposal by President Ranil Wickremesinghe, in his capacity as the Finance Minister, to draft a Bill to do away with SVAT, with effect from Jan 01, 2024. The Minister is on record as having told the post-Cabinet media briefing that this was done in line with the agreement with the International Monetary Fund (IMF)
JAAF has issued the following statement: “JAAF, representing the interests of the apparel industry, firmly believes that the abolition of SVAT for exporters will have detrimental effects on the sector, already reeling under the pressure of declining exports, jeopardizing the cash flows of businesses and impeding the efforts to return to overall growth.
The abolition of SVAT will create a further burden on an already stressed industry and, particularly, on company cash flows, as funds will be tied up in even the most efficient refund systems, JAAF stated, adding that the impulsive and non-consultative decision will have disastrous impacts on the long-term operations of a viable sector.
Whilst recognising the need for the Government to achieve its revenue targets. JAAF notes that the abolishing of SVAT is completely revenue neutral to the Department. Removal of SVAT will only lead to increased cash flow between the Exporter and the IRD. Sri Lanka’s track record on VAT refunds is poor and prior to the introduction of SVAT, exporters had refunds due from the Department that ran into over 18 months.
It is important to note that as history has shown, the refund system that existed before the introduction of SVAT had large fraud in the non-export sector, and not among exporting companies. Exporters utilize SVAT for the purchase of local inputs, which are subsequently converted into finished products for export. As such they have very little sales locally which reduces the potential for abuse of the system. In any event the likelihood of abuse is much higher in a system based on payment and refund as against a voucher system of SVAT.
Further, the decision has seemingly failed to consider the fact that apparel exporters may be compelled to import raw materials rather than purchasing them from domestic manufacturers and having their cash flows restricted by the VAT refund system. This will lead to increased imports, a detrimental effect on both the companies and the overall balance of trade. This will result in the loss of the unique vertical integration benefits Sri Lanka apparel has to offer, which over the long term may lead to questions being raised over the viability of companies and the jobs they create
Furthermore, the reintroduction of a VAT refund system, even under the most auspicious conditions, would necessitate the allocation of substantial Inland Revenue Department (IRD) resources for the constant follow-up and evaluation which a refund system will necessitate. This will only result in increased additional administrative costs for all parties and the misplacement of precious IRD resources and distracted staff.
Therefore, JAAF firmly recommends that the removal of SVAT from the export sector be approached with utmost caution. In the current climate of declining exports and its adverse effects on companies and employees, it is crucial to shield the sector from unnecessary internal shocks that would undoubtedly occur if SVAT were abolished, urging the Government to preserve SVAT for the export sector.”
News
President orders probe into judge’s resignation

By Saman Indrajith
President Ranil Wickremesinghe, who is currently in Berlin, yesterday ordered his Secretary Saman Ekanayake to launch a probe into the resignation of Mullaitivu District Judge and Magistrate, T. Saravanarajah, who heard the controversial Kurundimale temple case. The judge has cited receiving death threats as the reason for his resignation.
Judge Saravanarajah had not informed either the police or the Judicial Service Commission of the alleged death threats to him, sources said.
In a letter dated 23 September, 2023, addressed to the Judicial Services Commission, Judge T. Saravanarajah conveyed his decision to step down from various judicial roles including District Judge, Magistrate, Family Court Judge,
Primary Court Judge, Small Claims Court Judge, and Juvenile Court Judge.President’s Secretary Saman Ekanayake held discussions on the judge’s resignation with Minister of Justice Wijeyadasa Rajapakshe and Minister of Public Security Tiran Alles. It was revealed that the judge had not lodged any formal complaint of the alleged death threats prior to his resignation.
News
China pledges steadfast support to Sri Lanka

China will continue to firmly support Sri Lanka in pursuing a development path that suits its own national conditions, getting rid of the “poverty trap” and the “trap of non-development”, and safeguarding its independence, sovereignty, territorial integrity and national dignity, Ambassador Qi Zhenhong said at the 74th National Day Reception of the People’s Republic of China on Thursday.
Given below are excerpts of the Chinese Ambassador’s speech: “Right now, changes of the world, of our times and of history are unfolding in ways like never before, which leads to rapidly growing uncertainty, instability and unpredictability.
In view of these global challenges, President Xi Jinping has put forward three crucial global initiatives, namely the Global Development Initiative, the Global Security Initiative and the Global Civilization Initiative. We urge all countries to respect each other, seek common ground while reserving differences, and work together to meet the challenges of our times and build a community with a shared future for mankind.
“This year also marks the 10th anniversary of the Belt and Road Initiative proposed by President Xi Jinping. Over the past 10 years under the BRI cooperation, more than 150 countries, including Sri Lanka, and 32 international organizations, have made great progress in connectivity, infrastructure, trade, and investment, with about 3,100 joint projects bringing tangible benefits to the world. As the Chinese Ambassador to Sri Lanka, I am more than happy to highlight the major projects between our two countries, such as the Katunayake Expressway, the Southern Expressway, the CICT, the Hambantota Port and the Port City Colombo, etc.
“No matter how the world changes, China and Sri Lanka are good neighbours with mutual respect and trust, good partners with mutual benefit, and good friends who help each other. China’s friendly policy towards Sri Lanka is for all political parties and all people of Sri Lanka and maintains continuity and stability. In the past decades, many landmarks, such as the BMICH, the Supreme Court Complex, the Nelum Pokuna Theatre, the Polonnaruwa Kidney Disease Hospital and the National Hospital Out-Patient Department Building, have been gifted by the Chinese people to the Sri Lankan people.
Since the outbreak of the COVID-19, especially when Sri Lanka was faced with the economic challenges last year, China has been supporting Sri Lanka to the best of its ability. It includes not only providing emergency assistance from all walks of life in China, but also being the first to reach out to Sri Lanka to properly deal with its debt issues.
More importantly, China will continue to firmly support Sri Lanka in pursuing a development path that suits its own national conditions, getting rid of the “poverty trap” and the “trap of non-development”, and safeguarding its independence, sovereignty, territorial integrity and national dignity.”
News
Justice Minister sees police, judiciary and lawyers coming short on ensuring justice for all

The way the police, judiciary and lawyers operate had left much to be desired in ensuring justice for all, Minister of Justice Dr. Wijeyadasa Rajapakshe said at the National Law Week – 2023 celebrations yesterday.
Dr. Rajapakshe said that in a country with the rule of law, all citizens felt they had access to justice. The Minister said that the country faced a severe economic crisis in 2022. The breakdown of the rule of law was a major reason for the economic crisis, the Justice Minister said.
Chief Justice Jayantha Jayasuriya said at the same event that people needed to understand the roles and functions of the judiciary, police, mediation boards and other institutions of justice in order to obtain a satisfactory service.
“These institutions are there to ensure everyone has equal access to justice. If these institutions were not there, the rich and the powerful would always get their way,” the CJ said.
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