The government was rather cautious this week when the Leader of the House presented the Value Added Tax (Amendment) Bill in Parliament for the second time. Apparently the government was preoccupied with pushing the Bill, taking all precautions to avoid any kind of slips-ups.
Undeniably the government was in need of money to make up with the shortfall in revenue.
The government was compelled to modify the VAT Bill and present the same afresh after the Supreme Court struck down the Bill that preceded owing to technical glitches that due process had not been followed when it was presented to Parliament.
The government’s second attempt in presenting the bill came just one month ahead of Budget proposals for the next year. The Appropriation Bill for the year 2017 is to be presented in Parliament on October 20 and the Finance Minister is expected to make his Budget speech on November 10.
For the cash-strapped government struggling to keep the deficit under accepted fiscal limits, the deferment of VAT revenue was an unexpected blow. The initial proposal to increase the VAT from 11 to 15 percent from May 2 was suspended by the Supreme Court following petitions of Joint Opposition (JO) members Wimal Weerawansa and Sisira Jayakody at two instances.
At the same time, the Government also ran into turbulent times due to series of public protests against the VAT legislation. However, it was flexible enough to increase the threshold for the VAT liability of wholesale and retail trade to Rs. 50 million from the earlier proposed Rs. 12 million per annum when it redrafted the Bill with wide consultation of all stakeholders. It also exempted the diagnostic tests, dialysis, and OPD services from VAT. The SLFP, the main partner in the coalition government, too played an important role in shaping the new Amendments.
Looking for chinks in the Bill
The Government was extra-cautious in presenting the Bill again and strictly adhered to the stipulated legal procedure. Yet, the troubles were far from over for the Government. The JO members who were looking for chinks in the Bill with hawk eyes to scuttle its passage once again raised objections over a technicality.
Their contention was that the gazette had been sent to print prior to the Cabinet approval. UPFA MP Bandula Gunawardena, also the ‘shadow Finance Minister’ of the JO, stated the new VAT Bill had been published on September 9, though it was approved by the Cabinet on September 12. Hence the JO claimed the Bill was invalid.
In the absence of Finance Minister Karunanayake, acting Minister Lakshman Yapa Abeywardena had to fight tooth and nail to negate the arguments of the JO. To corroborate his position, he even produced two letters issued by the Government Printer and Attorney General that the legislation and its presentation were faultless. The Minister clarified that the Government Gazette is usually printed every Friday and supplement gazettes are printed in between. “The VAT bill was published on September 13 as a supplement to the gazette on September 9”, he explained.
Speaker Karu Jayasuriya accepting the acting Minister’s position stated anybody who has further problem could go before the court. Speaker Jayasuriya then decided to move ahead with the business of the House, but MP Wimal Weerawansa faced off. He repeatedly objected stating their problem was not answered. As he agitated he hurled insulting words towards the Speaker, to which the seemingly miffed Speaker promptly replied, “What did you just say? I order you to sit. Don’t try to threaten me”. MP Weerawansa not ready to back off retorted he did not threaten but was asking for a fair chance to express his views.
No sooner the new VAT Bill was presented to Parliament JO member Udaya Gammanpila, an Attorney-at-Law in profession, petitioned against it at the Supreme Court. Well aware of the ploys of JO, this move was not unexpected by the Government also. For the time being, it seems the Government has a few more hoops to jump through before it can enforce the VAT it desperately looks to funnel some money into Government coffers.
Conflict of interests
In a dramatic turn of events, the UNP, JO and JVP closed ranks with each other in Parliament this week to checkmate a Government Minister representing the SLFP.
Provincial Councils and Local Government Minister Faiszer Mustapha found himself in the cross hairs following a verbal spat with UNP backbencher Chaminda Wijesiri. The duo had a history to their dispute.
Badulla District MP Wijesiri was at loggerheads with Uva Provincial Council Chief Minister Chamara Sampath Dasanayake. The MP had been raising question after question in Parliament on various financial misappropriations allegedly committed by the latter. These questions placed on the order paper on regular basis resulted in a headache to subject Minister Mustapha, who piqued that he could not do any other work than finding answers to them.
The Minister was in the habit of reading the answers received from the Provincial Council denying the allegations repeatedly. The MP, who was not satisfied with the replies, accused the Minister of defending the Chief Minister.
The minister in this instance had a conflict of interest as he had provided legal counsel to the Chief Minister during a court case. When the MP highlighted this fact, the Minister admitted giving legal counsel to the Chief Minister, but said it was totally irrelevant to the answers he provided in the House.
Easy frictions
The duo locked horns in Parliament several times and the latest was related to an account of the Provincial Council allegedly taken over for personal use by the Chief Minister. The Minister termed the questions by the MP as insults intended to damage the personal reputation of the Chief Minister.
However, two senior UNP Ministers Kabir Hashim and Ranjith Madduma Bandara promptly came to the guard of their backbencher this time. Chief Opposition Whip and JVP Leader Anura Dissanayake also throwing his weight behind the MP quipped how could questions related to financial fraud be asked in a manner that protects the “honour and personality” of such a person.
“This question is related to a day light robbery of public funds. How can you refer to such a person in any better word than ‘hora’?”, he asked. The JO frontrunners Dinesh Gunawardena, Bandula Gunawardena and Wimal Weerawansa also cast their lot with the MP, putting the Minister in further trouble. The Speaker also stood his ground that asking questions in Parliament is a privilege of the MPs.
MP Wijesiri emboldened by the support he received said the intention of raising those questions was to help drive out the culture of corruption under the good governance rule. Minister Mustapha, who was at the receiving end of criticism from all corners, finally threw up his hands and said that he would hold a proper inquiry into the allegations. He asked the MP to send all documents he had in hand to support his allegations.
Another facet of this story is that it speaks of the easy frictions among those in the two main parties working in an uneasy political cohabitation.
Post-war narrative
Meanwhile “Eluga Tamil” (Rise up Tamils) Protest in Jaffna came to the centre of focus in Parliament following MEP Leader Dinesh Gunawardena inquiring the position of the Government about it.
Rising to an urgent matter of national importance, the MP said Chief Minister C V Wigneswaran has flouted the Constitution by making offensive statements against the country, its people and the Buddhism.
He questioned why the Government is silent when the Chief Minister was making statements harmful to the peace in the country. Leader of the House Kiriella said Prime Minister Ranil Wickremesinghe would make a lengthy reply at a future date on the question raised.
Kiriella said it was unfair for the MP to raise the matter when the Chief Minister had denied making those statements. “You are waiting in the wings to seize any opportunity to fan communalism,” he charged the JO.
Opposition Leader and TNA Leader R Sampanthan also tried to defend the Chief Minister despite simmering political tensions between them. Sampanthan was of the view that many of the statements attributed to the Chief Minister were not made by him.
Saying so the Opposition Leader was also cautious to distance his group from the organisers of the rally, stating his group had “good reasons” not to participate in it at a time they engage with the Government to attain a permanent solution to the national question through a practical devolution package.
The Constitutional making process has gathered momentum in closed doors unstirred by outside distractions. The Steering Committee led by the Prime Minister is to present its interim report in November spelling out the basic agreement on the shape of new Constitution. The fate of this process still hangs in the balance and its end will speak the number of true statesmen we have in both the North and South.
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