Vast improvement in Govt. revenue in last 18 months: Mangala
The Government over the past 18 months had witnessed a vast improvement in its revenue and in 2017 too, enabling the government to achieve a primary surplus in the budget for the first time since the 1950s. This fiscal consolidation process has enabled the Government to regain the confidence of markets and stabilize its economy. Market interest rates had begun to decline by prime lending rates falling by 144 basis points since July, 2017, which would pave the way for investment led growth, said Media and Finance Minister Mangala Samaraweera.
Speaking as to why the country needs to improve on tax collection, he said from 2019 to 2022, the country would face external debt repayments of approximately $15 billion. “This is an unprecedented burden that this government had inherited. This year too, we have to pay the highest debt repayment of Rs. 1.9 Trillion, while next year, there are foreign debt services of Rs. 4.2 Trillion and in 2020 Rs. 3.7 Trillion," he said, adding that most of it was for loans obtained by the previous government for projects with little or no economic returns.
Presenting to Parliament five Gazette Notifications issued under the Special Excise Provisions Act No. 13 of 1989, Media and Finance Minister Mangala Samaraweera speaking on the Government’s tax policies, said the government tax policies had focussed on some key principles and objectives over the last few years, first of which was to increase the share of the Government revenue which had declined to around 11% of the GDP in 2014. “This would enable us to better meet our debt repayments without compromising the government's expenditure, health, education etc., increasing the share of direct taxes which was one of the lowest in the world at 18% and our objective is to raise it to 40%, to create a more progressive and relevant tax structure.
The current 82% of indirect taxes, was a result in the burden of taxes being disproportionately borne by the poorer sections of the society. We need to rectify this situation as soon as possible, by broadening the tax base to bring the informal economy into the formal sector, thus creating a level playing field by ensuring that everyone compiles and shares the burden of taxes, reduce discretion in the tax policy and shift to a simple transparent rule based framework. This requires to minimize potential corruption and reduce tax leakages due to add hoc exemptions,” he noted.
The new Inland Revenue Act which would come into operation on April 1, he said, ensures that tax holidays and tax exemptions could no longer be given on the whims and fancies of the Finance Minister. “We have now created a rules based framework to take such decisions. This would go a long way in increasing the state of direct taxes, enabling the Government to achieve its revenue targets in an equitable manner, ensuring that the higher income earners absorb the larger shares of the tax burden. The previously practiced ad hoc subjective tax exemptions had been estimated to amount to 1.6% of the GDP in 2015,” the Minister added.
Little Hearts project in chaos: Rajitha
The ‘little hearts’ project has met with a snag due to haggling between the Anesthetists and surgeons over payment ratios, said Health, Nutrition and Indigenous Medicine Minister Dr. Rajitha Senaratne.
The minister was responding to a question raised by MP Vasudeva Nanayakkara, during the questions for oral answers round in Parliament yesterday, as to why the 'little hearts' project was being delayed, while the lives of over 1,000 children could be saved if this project gets underway.
Nanayakkara said that there are over 3,000 children in need of heart surgeries which have been stalled due to the lack of operation facilities. “To address this issue, a fund was created as the little hearts project and the government too allocated Rs. 350 million for this purpose. As this project requires around Rs. 2,000 million, if as the minister you intervene and expedite this project, the lives of around 1,000 children could be saved.”
In response, Minister Senaratne said the reason for the delay was that anesthetists had demanded the same fees as surgeons for their part in heart transplant surgeries. He said the usual norm internationally, was that anesthetists are paid one third of the amount paid to surgeons.
“The Little Hearts fund had been made and even surgeries had been completed. This is also being funded by International Rotary clubs, but the issue here is that anesthetists are demanding 50% similar to the payment received by the surgeons.
Previously, the arrangement was that the anesthetists were paid 1/3rd of the cost. However, now they are demanding for the same amount that is being paid to surgeons. Due to this tussle between them, I am still unable to start this project,” Minister Senaratne noted.
Active Liability Management Bill: 'To better manage country's debts'
As the debt burden at present was the most serious challenge facing the country, the government had to pay around Rs. Four Billion as repayments, National Policy and Economic Affairs Deputy Minister Dr. Harsha de Silva said, initiating the Debate on the Active Liability Management Bill in Parliament yesterday.
“This Bill is being presented in order to better manage the country’s debts. Today the interest on debts have increased from 20 percent to 80 percent. All loans obtained are not the same. Some of these loans are without any interest. Obtaining commercial loans commenced in 2006 – 2007. These loans differ in comparison to the previously obtained loans. It was then that the international sovereign bonds were introduced. However, these have to be paid in a short term, or bullet payment, unlike the previous long term repayment. Hence, this is a big challenge, but no government has been without paying these loans, as defaulting on payments would have severe international implications,” he noted.
However, why do we need this Bill? “Petitioners went to the Supreme Court against this Bill. Our government through the 19th Amendment to the Constitution, brought in a clause that no one could bring in, without proper procedures being followed. Previously, even the 18th Amendment was brought as a sudden Bill, leaving no room for anyone to even go to Court against it. Yet, under the Good Governance regime, we have safeguarded the rights of everyone to go to the Supreme Court and present their views. Based on that, this group went to Court.
There the Judges Sisira Abrew, Nalin Perera and Malalgoda considered all aspects presented and gave a verdict which was presented to Parliament. It determined that the Bill would have no impact in any way on the powers of Parliament in terms of finances,” he explained, adding that this Bill was in accordance with the Constitution.
He noted that it was being said on political stages that loans were only obtained for development purposes. “But that is not true, as there should be assets to show. We need to formulate the assets registry, which the previous regime failed to do. This Bill basically gives the Central Bank the opportunity to overcome the challenges pertaining to loan repayments,” he said, adding that this Bill was essential in managing our loans.
Depositors' investments will be protected at any cost:Kiriella
The Government would take all measures to protect the investments of depositors of ETI Finance Ltd. (ETIF) and Swarnamahal Financial Services PLC (SFSP), in accordance with the existing laws of the country, said Public Enterprise and Kandy Development Minister Lakshman Kiriella in Parliament yesterday.
He made this observation yesterday, in response to a query made by JVP Parliamentarian Bimal Ratnayake concerning the protection of the depositors of these two financial institutions and on rumours that are being circulated that the television and radio channels of the EAP company is to be sold to foreign companies. MP Ratnayake brought to the notice of the House that television and radio channels could not be sold to foreigners.
Minister Kiriella stated that these matters would be considered by the Central Bank and the Treasury. He added that those institutions would not act against the law and every thing would be done in accordance with the law.
The Minister also pointed out that those institutions have enough assets that could be used to pay back the depositors their due amounts if required.
'Detailed description on 475 roomed city hotel soon'
Development Strategies and International Trade Minister Malik Samarawickrama yesterday, stated that he would make a detailed description concerning the 475 roomed city hotel with 90 serviced apartments to be constructed at No 116, Galle Road, Colombo 3.
He made this observation yesterday, in response to a query made by JVP Parliamentarian Bimal Ratnayake on the Gazette Notification (2017.12.15) that was tabled in the House by Minister Samarawickrama and was to extend the time granted to implement the project.
According to the Gazette, the above project should commence commercial operations within a period of seventy seven months from the date of the Project Agreement signed with the BOI on July 19, 2017 and ending on December 31, 2018.
The JVP Parliamentarian demanded to know the project details, while the Minister said he would present these details at a later date.
Voting flawed due to technical defect: JO behaves in disruptive manner
The Joint Opposition members yesterday, behaved in a disruptive manner when the results of the vote on the Second Reading debate on the Active Liability Management Bill which was taken by way of e-voting, flawed due to a technical defect.
The incident occurred when the e-voting machine of the seat of Minister S B Dissanayake recorded his finger print, although he was not in the House. However, Minister Mangala Samaraweera's vote had not been recorded though he had cast his vote. The Joint Opposition members who rushed to the Well of the House, began to shout slogans.
Speaker Karu Jayasuriya suspended sittings at 6.10 pm, calling for a Party Leaders' meeting to find out as to what caused the mistake. The sittings resumed at 6.35 pm and the Speaker announced that the flaw haad occurred due to a technical defect.
"Minister Mangala Samaraweera whose seat was located adjoining Minister S B Dissanayake's seat, had mistakenly pressed his finger on latter's e-voting machine," Speaker Jayasuriya announced. "So the Second Reading would be taken again in the traditional manner."
However, Joint Opposition members walked out of the House in protest.
The Speaker proceeded with the process and the Second Reading and the Third Reading votes were taken accordingly.
Thereafter, the Leader of the House and Minister Lakshman Kiriella said that the Joint Opposition members banged on the door of the Speaker after they left the House and requested for an investigation.
Active Responsibility Management Bill passed
The Active Responsibility Management Bill was passed with a majority of 51 votes in Parliament yesterday.
The Bill which was presented by National Policies and Economic Affairs State Minister Harsha de Silva on behalf of Finance Minister Mangala Samaraweera, under the title Active Liability Management Bill, was later amended as the Active Responsibility Management Bill and later passed.
The Bill was passed with 53 votes in favour, while 2 voted against. JVP MPs Bimal Rathnayake and Sunil Handunnetti voted against. JO members left the House in protest, while TNA members were not present in the House.
All facilities would be provided for Thalassaemia patients: Health Minister
The Thalassemia Unit under construction in Kandy, would be completed by October, while further facilities would be provided to all Thalassaemia Centres that offer treatment to patients, said Health, Nutrition and Indigenous Medicine Minister Dr. Rajitha Senaratne.
He said so in Parliament yesterday, in response to a question posed by MP Thushara Indunil during the Oral questions for answers.
Minister Senaratne noted that there were 665 Thalassaemia patients reported from every Divisional Secretariat Division in the Kurunegala district from 2010 to date.
He said facilities have been provided to treat Thalassaemia patients in every hospital in the district.
The minister said that with the completion of the eight storied building for Thalassaemia treatment, bone marrow transplants for children could also be commenced, which could save the lives of children affected by this disease.
However, the minister said that there was no operating theater facility for Thalassemia patients or a gene bank in the district.
He noted that a programme has been initiated to identify Thalassemia carriers, while blood tests are to be done on grade ten students with the assistance of the Education Ministry.
He further noted that provision of blood for Thalassaemia affected children, provision of medications without a shortage, provision of Thalassaemia transfusion machines, modernization of Thalassaemia units and provision of specialist facilities would also be provided.
Drastic drop in smoking: Rajitha
Cigarette consumption in the country had dropped by one billion in 2017 due to the imposition of the 90 percent tax on tobacco by this government, said Health, Nutrition and Indigenous Medicine Minister Rajitha Senaratne in Parliament yesterday.
He made this observation, joining the Second Reading debate on the Active Liability Management Bill and debate on five orders under the Excise (Special Provisions) Act.
He also said that under the orders moved by the Finance Minister today, it has imposed a Rs 0.50 tax on each gram of sugar in sweetened drinks. He added that this was commendable, since sweetened drinks include more than 6 grams of sugar contained in 100 ml of sweetened drinks. The Minister said that generally a person should consume only 6 grams of sugar per day.
He added that this measure was supportive for the control diabetes and heart diseases. He also said that these orders have measures to prevent the production of artificial toddy, which has a negative effect on the health of the consumer.
He added that measures would be taken to reduce the use of oil and salt in the future. He added that with these measures, it would be easy to control noncommunicable diseases such as diabetes, heart diseases, obesity, high blood pressure, etc. which is the country's leading cause for premature deaths.
Active Liability Management Bill: All Govts' should be ashamed for bringing this Bill - Handunnetti
The existing government as well as the one under Mahinda Rajapaksa, should be ashamed for moving this Active Liability Management Bill, as both had boasted the country's ability of taking loans, said JVP Parliamentarian Sunil Handunnetti, in Parliament yesterday.
He made this observation, joining the Second Reading debate on the Active Liability Management Bill, which is one to authorize the raising of loans in or outside Sri Lanka, for the purpose of Active Liability Management to improve public debt management in Sri Lanka and to make provisions for matters connected therewith or incidental thereto. Along with this Bill, five orders under the Excise (Special Provisions) Act were presented for debate.
He said that even former President Mahinda Rajapaksa, had exaggerated concerning the Government's ability to obtain loans, while today, the loan and premium of the country in 2019 has increased to Rs 4.2 Trillion, which was three fold of the GDP.
He added that this Government's strategy of obtaining loans to settle the existing loans, was plunging the country from the frying pan into the fire. He pointed out that development rate of the country which was 4.8 percent last year, had dropped to 3.3 percent this year. He added that the inflation rate which was 4 percent last year, had increased to 7.3 percent this year.
MP Handunnetti said that the money which was been taken by way of loans, should be deposited in Government banks. He added that the interest of the deposited monies should go to the people of this country.
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