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US cautions China-backed Port City could turn into money-laundering haven

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(ANI) US Ambassador to Sri Lanka and Maldives, Alaina Teplitz on Saturday warned Sri Lanka of unintended consequences of ‘nefarious actors’ who may try to misuse a China-backed Colombo Port City’s easy business rules as a permissive money laundering haven amid concerns of tax leaks.

Sri Lanka has unveiled draft legislation for a Colombo Port City Commission which allows for sweeping tax breaks, tax-free salaries and to be an offshore financial centre.

“Any legislation relating to the port city has to be considered very carefully for its economic impact,” Teplitz told reporters in Colombo in an online discussion.

“And of course among those un-intended consequences could be creating a haven for money launderers and other sorts of nefarious actors to take advantage of what was perceived as a permissive business environment for activities that would actually be illegal.”

The agency running the Port City would have extensive powers to exempt businesses from taxes of up to 40 years, though it is not a tax haven in the traditional sense.

Sri Lanka’s tax revenues have plunged in 2020, raising concerns over debt and the fiscal path, credit downgrades and the ability of the government to provide vital public services to the people, while managing loss-making state enterprises.

“I do recognize that the government of Sri Lanka wants to take advantage of the investment that has already been made in creating the Port City foundation, but the legislation really needs to be reflected to address these challenges and to be careful of what it might be to open doors to bad practice and unfair competition for the rest of the country,” said Teplitz.

Teplitz said an idea by US Treasury Secretary Janet Yellen to have a global single corporate tax was just a proposal with no immediate impact but Sri Lanka should think about tax concessions in its own interests.

Sri Lanka is under the worst import controls since the 1970s using the 1969 law, though exchange controls are less draconian.

Sri Lanka’s economy was progressively closed with an import control law being enacted in 1969 as money printing pressured the rupee, which worsened after the break-up of the Bretton Woods in 1971, as then-Federal Reserve Chief Arthur Burns printed money to target an output gap, forcing dollar to be floated.

Sri Lanka’s attempts at creating numbered accounts as part of creating Non-resident foreign currency accounts, after re-opening the economy in 1978 was also resisted by Western nations.

Citizens are also allowed to hold up to 15,000 US dollars as well as unlimited amounts in dollar accounts outside to protect their savings from monetary expropriation, in relaxation of legal tender laws.

 

 



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Booster shots: Poor public response makes GMOA contemplate legal remedy

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By Rathindra Kuruwita

Lack of enthusiasm among the public to receive the booster dose was disconcerting, given that Sri Lanka had a long-established and highly functional immunisation programme, the Government Medical Officers Association (GMOA) said yesterday.

By 20 January 2022, 64.56% of Sri Lankans had been fully vaccinated, but only 22.47% had received the booster dose, the GMOA said.

“At the early stages of vaccination against Covid-19 the public response was favourable. However, the current waning of interest might be driven by the myths and rumours regarding the vaccines. It is important to take measures to counter such misinformation by raising public awareness of the ongoing vaccination programme.”

“Legal action against those responsible for the spread of communicable diseases can be taken under the Penal Code”, GMOA Secretary Dr. Senal Fernando said. “Provisions of the Quarantine Ordinance can be used against persons who do not comply with directions given by the proper authorities under the Quarantine Ordinance,” he said.

The GMOA said that several countries had made it mandatory to have proof of vaccination for entry into public places. The same thing could be done in Sri Lanka to ensure that more people got vaccinated.

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Govt., SJB haggle over procedure to rescue country

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By Saman Indrajith

The SJB on Sunday said that it was wrong for the President and the government to seek the assistance of the Opposition to steer the country out of the present crises without creating a proper forum to obtain such assistance.

Addressing the media at the Opposition Leader’s Office in Colombo, Chief Opposition Whip and Kandy District MP Lakshman Kiriella said President Gotabaya Rajapaksa delivering the latter’s third Policy Speech in Parliament last week had sought the assistance of the Opposition. “His speech is full of excuses. He sought our assistance but there is no forum to offer our assistance. The government too has asked for the same several times. If the government needs the Opposition’s assistance, what it should do is to declare a state of national disaster situation so that the Opposition could make use of Parliament as the forum for our contributions. That has not been done so far. The President and the government could make use of the provisions of the Disaster Management Act No 53 of 2005 to form a disaster management committee comprising the government and opposition MPs.

The President is the ex-officio Chairman of the committee, the Prime minister and the Opposition leader are there with 24 government ministers and five opposition MPs. In addition to that there are provisions to the involvement of the Chief Ministers of Provinces in the committee. If the government genuinely needs our support it should have started forming that committee. There are laws enabling the formulation of mechanisms to help people the government does not make use of them. We have been repeatedly asking the government to appoint that committee.

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Lord Ahamad plants kumbuk tree sapling during visit to Bellanwila – Attidiya Bird Sanctuary

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By Ifham Nizam

Lord Tariq Ahmad of Wimbledon, Minister for South Asia, the United Nations and the Commonwealth at the Foreign, Commonwealth and Development Office of the UK, planted a Kumbuk (Terminalia arjuna) sapling at the Bellanwila – Attidiya Bird Sanctuary last week.

The Department of Wildlife said Lord Ahmad had been joined by the British High Commissioner in Colombo Sarah Hulton, Hasanthi Urugodwatte Dissanayake, Acting Additional Secretary of Ocean Affairs, Environment and Climate Change at the Foreign Ministry, Saman Liyanagama, Wildlife Ranger of the Colombo Wildlife Range, Department of Wildlife Conservation and Professor Sevvandi Jayakoddy, Senior Lecturer of the Wayamba University.

The planting activity was followed by a brief visit to the wetland and Prof. Jayakoddy, and Liyanagama explained the importance of wetland ecosystems as well as challenges in conservation and maintenance, while Dissanayake briefed him on the Sri Lanka’s pioneering work related to mangrove restoration and conservation, both at policy level as well as at the ground level.

Hasini Sarathchandra, Publicity Officer, Department of Wildlife Conservation said British High Commission in Colombo with the International Water Management Institute Headquartered in Sri Lanka, had already launched a project under the Darwin Initiative at the Baddegana Wetlands.  Similar collaborations are envisaged involving the Bellanwila – Attidiya Bird Sanctuary.

Wetlands play an important role in our natural environment. They mitigate the impacts of floods, absorb pollutants and improve water quality. They provide habitat for animals and plants and many contain a wide diversity of life, supporting plants and animals that are found nowhere else. Colombo is a city built on and around wetlands. Despite progressive loss and degradation, wetlands still cover some 200 km2 of the Colombo metropolitan area and suburbs.

The wetlands are fundamental to the well-being of the people of Colombo and its suburbs. The wetlands can reduce extreme air temperatures and make the city more live able due to evaporative cooling. The wetlands provide a critical land-mass which helps to maintain the richness of Colombo’s biodiversity.

The Bellanwila-Attidiya wetlands was declared as a bird sanctuary on 25 July 1990, due to biodiversity of the area and its contribution to controlling floods. The wetlands, which span over 930 acres, host endemic species and is a paradise for migratory birds. 44 species of fish including 06 which are endemic to the country have been identified in the Bolgoda River which flows through the wetlands. The wetlands are also home to 21 reptilian species, 17 species of mammals and 10 butterfly species. Bellanwia-Attidiya sanctuary falls within the upper catchment of the Bolgoda river basin. The Department of Wildlife Conservation manages the Bellanwila-Attidiya Sanctuary.

Selection of the location was also due to the close collaboration that Sri Lanka has with the Government of the UK on conservation of mangroves and wetlands.

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