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Prez announces measures to tackle economic crisis

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By Saman Indrajith

President Ranil Wickremesinghe told Parliament yesterday that the government would bring down the primary deficit to 2.3% of GDP by 2025 and increase revenue to 14% of GDP by 2026.

Making a special statement in the House after tabling a copy of the IMF- Extended Fund Facility (EFF) agreement, the President said that the standard corporate income tax rate had been raised to 30%, and sectoral tax holidays had been eliminated. The PAYE tax rate had been raised from 12% to 15%, and the tax exemption limit had been reduced from Rs. 300 million to Rs. 80 million.

The President told Parliament that the government was planning to reduce existing exemptions on VAT by 2024, remove the simplified VAT system, and expedite its reimbursement. Estate Duty would be introduced as a property tax by 2025, with a minimum tax exemption allowance, he said.

President Wickremesinghe said the government was aiming to reduce the inflation rate to 4-6% and bring it to a single digit by mid-2023.

“We are planning to reduce the budget deficit and stop printing money. The forex market thresholds and guidelines will be relaxed while allowing market criteria to determine its activities.

The Central Bank plans to purchase foreign currency to build up foreign reserves,” he said.

The government plans to make public the list of individuals and institutions who enjoy tax concessions and tax holidays, and large-scale government procurement contracts. These measures aim to increase transparency and combat corruption in the country.

The President stated that he had previously requested the support of the opposition to rebuild the economy, but did not receive it. “I made similar requests during the opening of Parliament and Budget debates, but to no avail. Despite my efforts, the opposition refused to extend their support citing various reasons,” he said.

He said that at a time when the country was in chaos in July last year, no one was willing to accept responsibility and he was requested to take over. “I had no power in Parliament, no Members of Parliament from my Party to call my own.” But, He said his strength was his conviction that he was capable of rebuilding the country.

“Some people consider the IMF EFF as just another loan, while others claim that the total debt of the country cannot be paid off with the amount received.”

President Wickremesinghe noted that these statements show either ignorance or a willingness to betray the country for political gain.

The President said that the IMF facility is not a loan given at burning interest but a credit facility given to rebuild a fallen country.

He said that the IMF EFF will restore Sri Lanka’s international recognition, ensure the country is not bankrupt and help banks regain international recognition.

“This will create opportunities for low-interest credit, restore foreign investors’ confidence and lay the foundation for a strong new economy,” he said.

“We are now starting a new journey. We have to introduce many economic reforms throughout the process. The foundation for our success will be through this path,” the President said, adding that some of these reforms have already been proposed and implemented through the interim budget of 2022 and the budget for 2023.



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PNS Shahjahan departs after successful naval exercise

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The Pakistan Naval Ship (PNS) Shahjahan which arrived in Colombo on 02nd June 2023 on a two-day official visit, departed the island on 04th June 2023.

 

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EC opposes govt. move to appoint its henchmen to monitor local councils

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By Priyan de Silva

The Election Commission (ECSL) has opposed a move by the government to appoint representatives of the Chairpersons of the Regional Development Committee to monitor local government institutions.

ECSL Chairman Nimal G. Punchihewa told The Island that the government had informed the ECSL of its plan to appoint representatives of the Chairpersons of the Regional Development Committee to monitor the local government bodies and the ECSL had decided to write to the Ministry of Local Government opposing the move, he said. A Chairman of a regional development committee ESD a representative of a particular political party and it would be unfair by other parties for such appointments to be made, the EC Chairman said.

Punchihewa said that the administration of local government institutions could be done through Municipal Commissioners and Divisional Secretaries.Many political parties had complained against the government move, he said.

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JVP says govt. has enough funds for elections

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By Saman Indrajith

The JVP would file a fresh application before the Supreme Court against the government for not holding the local council polls, JVP MP Vijitha Herath said yesterday.Addressing the media at the party headquarters in Pelawatte, Herath said that his party had ascertained fresh information by invoking the Right to Information Act about the funds needed for the holding of the elections and his party would file another fundamental rights case against those responsible for conducting elections.

“The LG polls were to be held on 09 March. They were postponed until 25 April, and later they were put off indefinitely. The President appoints Governors to the provinces and the local councils are under them. Now, he says no party commands the support of 50 percent of voters.

Is this reason why he is not holding elections? His claim that there are no funds for elections is not acceptable. The Election Commission (EC) has, in a letter to the Secretary to the Ministry of Finance, asked for Rs 1,100 million in installments for conducting local government elections. The Secretary to the Ministry of Finance, on 07 March, informed

the EC that the latter’s request had been referred to the Minister of Finance on the same day. But so far the money has not been released. As per a report released by the Treasury, the government revenue was Rs 177,900 million in January this year alone. Of that amount, Rs 156,760 was allocated to government institutions. The Treasury has Rs 21,410 million. In February, the government revenue was at Rs. 271,750 million and of that Rs. 208,620 million was spent. The balance was Rs 63,130 million. In January and February, the Treasury had Rs 84,270 million. These figures have been officially confirmed by a Deputy Treasury Secretary. The EC is seeking only Rs 2,460 million for elections. So, the claim that there is no money for elections is false as per official records. We will submit this information to the Supreme Court when we file a fresh application. We will prove that the government has lied to people,” Herath said.

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