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Two private member’s Bills presented to amend two tax laws to bring about parliament oversight

SJB MP Eran Wickramaratne yesterday (08) tabled two private member’s Bills to amend both the Value Added Tax Act No. 14 of 2002 (as amended) and the Special Commodity Levy Act No. 48 of 2007.
The following is the text of a statement issued by the former State Finance Minister: “These two amendments seek to facilitate parliamentary control over public finance as constitutionality required, and prevent the executive (Minister) from abusing statutory powers, including by (corruptly) granting benefits to a chosen few.
As the people of Sri Lanka are calling for more accountability and transparency with regard to public finances in the country, I have brought these two amendments to ensure parliamentary control on any changes to Value Added Tax (VAT) and to the Special Commodities Levy.
Sri Lanka’s parliament is constitutionally supposed to have full control over public finances (article 148).
However, there is currently tax legislation that actually violates this imperative provision, and instead gives discretion to the minister on: (i) tax exemptions, (ii) tax base, and (iii) tax rate. This type of discretion is seen in two key tax acts, the Value Added Tax Act No. 14 of 2002 (as amended) and the Special Commodity Levy Act No. 48 of 2007.
In both pieces of legislation, the minister has complete discretion to change taxation and simply announce it through a gazette notification. The decision to change taxation comes into effect immediately on the Minister’s signature and will only later be approved by Parliament. Even if it is not approved, whatever actions by the minister (e.g. reducing VAT or SCL) through the Order cannot be reversed by parliament but only discontinued. This leaves an extraordinary amount of power in the minister’s hands and leaves room for the tax system to be abused in favour of vested interests and potential corrupt activities.
The well-known sugar scam from 2020 is an example of the impacts of leaving the discretionary power with the minister. Prior to October 2020, sugar taxes were LKR 50 per kilo of sugar, and were drastically reduced to 25cents per kg. This is a reduction of 99.5% taxes on imported sugar. The gap between the cost to the importer and the market price has increased substantially after the tax reduction. According to the National Audit Office of Sri Lanka, between October 2020 and February 2021 we have cumulatively lost LKR 16 billion in potential tax revenue. PublicFinance.lk has noted that the benefit of the tax reduction was not passed on to the consumer and importantly that Sri Lanka has lost approximately LKR 59 billion in cumulative revenue from October 2020 until December 2022 by cutting the SCL on sugar imports.
The discretionary power of the minister to make ad hoc changes to taxation can also have serious impact on the country’s economy. At a time when the country is facing a severe economic crisis, and when there are calls from the people to have more transparency and accountability of our public finances, it is imperative that parliament retains full control over public finance as mandated by Article 148 of the Constitution.
Therefore, I have submitted these two amendments to amend the VAT and SCL to promote fiscal accountability and ensure that decisions on taxation are transparent and are discussed in the public domain.
The government in 2022 tried to bring a new tax called the Special Goods and Services Tax (GST) Bill, which gave the minister similar powers to that which presently exists in the VAT and SCL framework. However, the Supreme Court in very strong terms held the Bill to be unconstitutional and even violated the sovereignty of the People. The Court held: Thus, by empowering the Minister in the manner provided in clauses 2 and 3, the Parliament distinctively and manifestly loses control over public finance and unconstitutionally alienates such power to the Minister. In the circumstances, this Court holds that clauses 2, 3 and 4 individually and collectively amount to an infringement of Article 148 of the Constitution read with Article 76, and by virtue of such infringement violates Article 4 read with Article 3 of the Constitution.
The proposed amendments will bring the relevant portion of the VAT and SCL laws in conformity with the constitutional framework, as recognised by the Supreme Court in the Special GST Bill Determination.”
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Six lion cubs born at Ridiagama Safari park named

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President meets Kuwaiti Prime Minister Sheikh Ahmed Abdullah Al Ahmad Al Sabah

President Anura Kumara Disanayake, who is currently in the United Arab Emirates to participate in the 2025 World Governments Summit, met with the Prime Minister of State of Kuwait Sheikh Ahmed Abdullah Al Ahmad Al Sabah on Tuesday (11) afternoon .
During the discussion, President Disanayake highlighted Sri Lanka’s improved political and financial stability, emphasizing the expanded potentials in investment and tourism sectors.
Both leaders focused on strengthening trade relations and diversifying markets between the two countries. They also discussed the importance of exploring new strategic initiatives to enhance economic cooperation.
President Disanayake expressed his gratitude to Prime Minister and the State of Kuwait for its support in securing the International Monetary Fund (IMF) loan facility, acknowledging its contribution to Sri Lanka’s economic recovery.
Additionally, the President noted that approximately 155,000 Sri Lankan workers are employed in Kuwait, contributing USD 700 million in annual remittances, which serves as a significant boost to Sri Lanka’s economy.
Minister of Foreign Affairs, Foreign Employment and Tourism, Vijitha Herath, accompanied the President on this visit.
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AKD’s attention drawn to ITAK’s threat to demolish Tissa Raja Maha Viharaya

By Shamindra Ferdinando
Former Public Security Minister Rear Admiral (retd.) Sarath Weerasekera yesterday said that it was the responsibility of the NPP government to ensure the safety of Tissa Raja Maha Viharaya, Kankesanthurai.
President Anura Kumara Dissanayake holding the defence portfolio in addition to being the Commander-in-Chief of the armed forces should look into the developing situation, the retired Navy Chief of Staff said.
The ex-lawmaker was responding to Illankai Thamil Arasu Kadchi (ITAK) leader S. Sritharan’s threat to demolish the Tissa Raja Maha Viharaya unless the government handed over the premises to owners of the land acquired over the years to build the Viharaya.
The warning issued at a media conference held at the Jaffna Press Club recently should also draw the immediate attention of the Parliament, Weeraselera said, stressing that the ruling party as well as other political parties represented in parliament couldn’t turn a blind eye to what he called an explosive development.
Declaring that the ITAK had the backing of the north-based EPDP and TNPF, the ITAK chief has vowed to launch a protest against viharaya and to take over the premises.
Weerasekera said that Public Security and Parliamentary Affairs Minister Ananda Wijepala should take immediate measures to prevent build-up against Tissa Raja Maha Viharaya.
According to him, during his tenure as the Chairman of Oversight Committee on National Security he inquired into the situation therein and addressed the issues at hand. Therefore, the ITAK and other Jaffna-based political parties shouldn’t seek to trigger chaos not only in Jaffna, but in other parts as well.
Responding to another query, Weerasekera, who unsuccessfully contested the last general election on the SLPP ticket, urged the NPP as a political party to take a stand as the north was won by them. The unprecedented defeat suffered by the ITAK at the Nov 2024 general election proved that the vast majority of northerners had rejected separatist agenda pursued by the ITAK etc., and therefore it was trying to incite people, Weerasekera said.
ITAK had conveniently forgotten that it regained the right to represent Tamil speaking people again only after the military had eradicated the LTTE that was recognised by the party way back in 2001 as the sole representative of Tamil speaking people, Weerasekera said, asserting that the planned action against Tissa viharaya could be part of their strategy to regain lost ground in the northern and eastern provinces.
Weerasekera said that the ITAK’s threat reminded him of the violent Pongu Thamil campaign launched in the aftermath of 2002 Ceasefire Accord signed between the then government and the LTTE.
Asked whether he intended to push SLPP to raise the temple issue in Parliament, the former minister answered in the affirmative, saying that all right thinking MPs would oppose the ITAK’s racist move.
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