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Rajapaksa presents ‘non-traditional’ Budget

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* Rs. 30 bn for rectifying teachers’ salary anomalies

* PTL’s Rs. 8.5 bn to be transferred to Treasury

* VAT on banks, financial service providers up from 15% to 18%

* One-time tax surcharge of 25% on some companies, etc.

* Rs. 5 bn for agrotechnology development

* Rs. 1 bn to Batik and Handloom manufacturing sector

* Rs. 5 bn for basic infrastructure development

* Price of cigarette increased by Rs 5

* Retirement age of public sector increased to 65

* Period for MPs to qualify for pension up from five to 10 yrs

by Saman Indrajith

Finance Minister Basil Rajapaksa, presenting what he described as a non-traditional Budget, yesterday, said that it would help increase government revenue and keep expenditure in check to boost investor confidence.

Minister Rajapaksa said that the government was presenting the Budget at a time when the country and the entire world were facing a difficult period.

“We are presenting the Budget amidst global challenges. Many countries are focusing on internal problems, there are climate problems, inflation and Covid-19 have disrupted economic activities,” Minister Rajapaksa said, presenting the country’s 76th annual Budget.

He said the country had been locked down several times to protect the people against Covid-19. The national economy had suffered a loss of around Rs. 500 billion rupees in revenue, he said.

Now, the country had achieved its vaccination target and was working closely with multilateral lenders to revive the economy, he said, adding that Rs. 30 billion would be allocated to rectify the salary anomalies affecting teachers and principals.

A one-time tax surcharge of 25% has been imposed on persons or companies with taxable income over Rs. 2 billion for the year of assessment 2020/2021.

Rs.100 billion is expected to be earned through this tax.

VAT on banks and financial service providers under supply of financial services by specified institutions will be increased to 18 percent from 15 percent. This tax should be paid monthly from 01 January 2022 to 31 December 2022. Furthermore, this tax should not be passed on to the customer. Rs 14 billion is expected to be earned through this tax.

Minister Rajapaksa proposed to transfer Rs. 8.5 billion that Perpetual Treasuries Ltd. had earned in violation of the Code of Conduct, from the Central Bank of Sri Lanka, to the Treasury.

He said the economy had to be developed in a sustainable manner.

Sri Lanka was on track to post a budget deficit around 10 percent of gross domestic product with the deficit up to July being at 6.2 percent of gross domestic product.

The price of a cigarette would be increased by five rupees, Minister Rajapaksa said, adding that the decision had been taken as the prices of cigarettes had not been increased in three years. The government expects to rake in an additional Rs. 8 billion.

The Finance Minister proposed to increase excise tax with immediate effect, and additional revenue of Rs. 25 billion is expected through this tax increase, and the gazette regarding the relevant tax increase would be published within a day.

Minister Rajapaksa said that the budgetary allocations for the MP would be increased by Rs. 5 million each and Rs. 15 million would be allocated to each MP for development activities in their electorates. Relief would be provided to school van and school bus operators affected by Covid-19, Minister Rajapaksa said, adding that Rs 400 million would be allocated for that purpose.

Rs. 700 million would be allocated for the provision of relief to three-wheeler drivers and Rs. 1,500 million for the bus operators, who had lost their revenue due to the Covid-19 pandemic.

Finance Minister proposed the employment of methods such as Blockchain technology, and moving towards mobile banking through the digitalisation of banks.

“Our government is always dedicated to safeguard the interests of our farmers,” he said, adding that however a clear law had not been formulated for this purpose. He proposed the drafting of the ‘Green Agricultural Development Act’ for the benefit of the farming community.

The country would be developed as a hub for “Wellness Tourism” and focus its attention on avenues of tourism such as “Event Tourism”, “Destination Tourism” and providing tourists with “Home Stays”.

A regulatory authority would be established for three-wheelers, Minister Rajapaksa said, noting that telecommunications network covering the entire country would be established immediately and all 10,155 schools in the country provided with fibre optic internet connections. Telecommunications connectivity and Internet access shortcomings in the country had been noticed during the pandemic, the Minister said, adding that the construction of new office buildings for the state institutions would be suspended for two years.

Annual Warrant for state expenditure would be made a Quarterly Warrant in the future, he said.

The government is planning to extend the retirement age for state sector employees to 65 years as the average life expectancy had increased and Sri Lanka’s population was ageing. “As they are able to engage in active service for a longer period of time, it is essential to make use of their experiences and maturity,” the Finance Minister added, proposing to extend the age limit for public servants’ pensions to 65.

Fuel allowance for ministers and state officials would be reduced by five litres each a month.

The minimum period an MP has to serve to obtain the pension has been extended from five to ten years.

The Finance Minister said that proposals and opinions of several organisations and individuals were obtained before preparing the budget proposals.

Since independence, all the government had failed to act with a clear vision with regard to the country’s foreign reserves, Minister Rajapaksa said.

The “international drug mafia” was one of the biggest obstacles the country was facing, he said.

“We are a government that does what it says,” Minister Rajapaksa said, referring to the vaccination programme.

There was no more room for terrorism and extremism, said Minister Rajapaksa. “Today, Sri Lanka is one of the most peaceful countries in the world.”

Yesterday’s was the 76th budget of an independent Sri Lanka. It is also the second budget of the incumbent government, and the first presented by Finance Minister Basil Rajapaksa.

The 2022 Appropriation Bill was presented to Parliament by the Minister of Finance on 07 Oct.



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SL defenceless, warn experts

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New COVID variants

By Rathindra Kuruwita

Due to the lax testing at the Bandaranaike International Airport (BIA), there is a strong possibility that any new variant of COVID-19 entering the country, College of Medical Laboratory Science (CMLS) President, Ravi Kumudesh told The Island yesterday commenting on the detection of a new coronavirus variant spreading in South Africa.

Even a travel ban would be useless unless the country enhances its testing and surveillance capacities, Kumudesh said.

Kumudesh said that PCR tests were not conducted on passengers on arrival and that it was likely that even those not fully vaccinated were entering the country. “Gene sequencing in respect of those infected with COVID inside the country was at a minimal level, and therefore, there is no way we can find out whether a new variant has entered the country until it is too late.

“There are two state-of-the-art labs in the BIA but no tests are done there. We are not ready, at all. Several nations are imposing travel bans on travellers from South Africa and the region. Perhaps, we should follow suit. However, the fact that we don’t test those coming in means that even a travel ban might be useless,” he said.

Kumudesh added that the number of PCR tests conducted had dropped to such a low level that reagents used in some labs for PCR testing are now nearing the expiry dates. The attitude of health officials at the airport is such that everyone operates on the basis that testing of passengers is not important.

Executive Director of the Institute for Health Policy (IHP), Dr. Ravi Rannan-Eliya yesterday said the detection of the new South African variant was potentially very bad news for all countries, and certainly for Sri Lanka.

“We still don’t have sufficient data on this, but I am very worried. It was only discovered a few days ago, but the scanty evidence strongly indicates that this new variant is driving a rapid increase in infections in S Africa. Only 100 cases have been confirmed officially, but reports indicate it may be 90% of new cases since Wed in Johannusburg,” he said.

Dr. Rannan-Eliya said that his best guess was that three out of four South Africans had been infected by COVID during the pandemic. Thus, a large number of them had acquired natural immunity. Moreover, 25% of others have been vaccinated.

“So this rapid spread despite a lot of immunity is very disturbing. This really points to this new variant—B1.1.529—being both more infectious and also significantly immune resistant. Something that also matches with its particular mutations,” he said.

Dr. Rannan-Eliya said he was not surprised at the emergence of the new variant because contrary to many experts who drink the kool-aid, there is no scientific basis to think SARS-CoV-2 had matured in its evolution. It might still have a lot of potential to evolve greater immune evasion and virulence, and that we should act on that basis.

“Second, because most of the world is following the misguided strategy of just accepting the virus (hey you – USA, UK, Sri Lanka…), the virus has plenty of chances to keep on mutating more because the truth is more of the virus is circulating than ever before. Third, despite a lot of nonsense about how T-cell immunity is going to protect us, there’s really no evidence that either infection or current vaccines and boosters will ever give us long-lasting immunity. We simply don’t know.”

Countries like South Africa, Peru, etc., who had such high levels of infection that much of their population was infected more than once, still continue to suffer new waves of infection.

“So this is bad news for all of us humans on planet earth, but very definitely for us in Sri Lanka. Why? Because based on how our medical establishment and govt authorities think, we will be slow or refuse to put the necessary border controls in to prevent this entering. And when it does enter-which is inevitable if this variant spreads globally–we will be slow to detect its entry, we will refuse to sound the alarm, and we will do everything but actually attempt to stop it. That’s been our track record, so why would it change? Worth noting that if this starts a new wave in Southern Africa, it’s just three to four months after their third wave. So just as immunity starts waning appreciably from natural infection (or vaccines). That gives us a strong hint of what our future holds unless we end this pandemic.”

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Navy deploys lagoon craft at Kurinchankerny until construction of new bridge

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Residents waiting for the boat

Sri Lanka Navy began providing transport facilities at the Kurinchankerny lagoon following the recent tragedy that claimed several lives. This service will continue until the construction of a new bridge at Kurinchankerny, Kinniya in Trincomalee is completed.

This initiative was set in motion following the directives of Commander of the Navy, Vice Admiral Nishantha Ulugetenne. The Navy deployed a Lagoon Craft, capable of carrying 25 passengers safely at a time from Thursday (25) under the supervision of the Eastern Naval Command. The lagoon craft will be in service from 7.00 a.m. to 8.00 a.m. and from 12.00 noon to 2.00 p.m. each day. Further, the Navy erected a temporary jetty to allow passengers to board the vessel safely.

A schoolgirl on her way to the ferry
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UN Assistant Secretary General during talks with President pledges to work closely with Sri Lanka

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The United Nations will always work closely with Sri Lanka, said Khaled Khiari, UN Assistant Secretary General for Political, Peacebuilding and Peace Operations. Khiari made these remarks when he met President Gotabaya Rajapaksa at the Presidential Secretariat, on Thursday (25).

UN Assistant Secretary General Khiari is visiting Sri Lanka as a follow-up to the bilateral meeting with the President and the UN Secretary- General Antonio Guterres held in September this year on the sidelines of the 76th Session of the UN General Assembly. Khiari conveyed the best wishes of UN Secretary-General Guterres to President Rajapaksa and said that the UN is willing to engage in a constructive and positive engagement with Sri Lanka.

Expressing satisfaction over the President’s affection and interest in the environment, the Assistant Secretary General appreciated Sri Lanka’s commitment to achieving the Millennium Development Goals. The President explained that steps are being taken to plant 100,000 mangroves with the assistance of the Navy and actions are being taken to prevent climate change through environmental conservation programmes.

President Rajapaksa expressed gratitude to the UN agencies and donors that have assisted Sri Lanka through the COVAX facility to make the vaccination drive successful and in facing other challenges in the face of the COVID-19 epidemic.

The President pointed out that the government’s development programme implemented in the North and East after the end of the war in 2009 had brought about rapid development. The President recalled his invitation made while participating in the UN General Assembly to the diaspora to work together with all communities after visiting Sri Lanka. The President said that he hoped that the invitation would be met with positive initiatives.

The two sides exchanged views on unity and relations between communities. An environment where all communities can live freely has been made available in Sri Lanka. The President pointed out that the Minister of Justice is from the Muslim community, the Attorney General is from the Tamil community and many of those holding other key posts are of different communities. President Rajapaksa said the government has undertaken a great task in building unity among the communities and therefore, no one should have any doubt in this regard.

Both sides were of the view that education was fundamental to unity among the communities. President Rajapaksa said that the process by which South Africa has been able to end apartheid and move forward will be studied and the lessons that can be learned from it and what can be implemented will be looked into. The President also expressed hope that the United Nations will provide assistance in this regard.

Secretary to the President Dr. P.B. Jayasundera and Principal Advisor to the President Lalith Weeratunga, Resident Coordinator of the United Nations in Sri Lanka Hanaa Singer-Hamdy, and Political Officer at the UN Peace Operations Department’s Political and Peacebuilding Affairs Department Chiaki Ota were also present.

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