Sri Lanka hikes tax rates to boost government revenues

Sri Lanka’s cash-strapped government has announced a taxation overhaul to boost revenue amid the country’s crippling economic crisis, hiking value added taxes and corporate income tax, and slashing the relief given to individual taxpayers.

Prime Minister Ranil Wickremesinghe, who took office this month and plans to present an interim budget within weeks, said on Tuesday the measures were necessary as the current state of government finances was unsustainable.

“The implementation of a strong fiscal consolidation plan is imperative through revenue enhancement as well as expenditure rationalization measures in 2022,” Wickremesinghe’s office said in a statement.

Sri Lanka’s inflation rose to 39.1 percent in May, its statistics office said – a record level, compared with the previous high of 29.8 percent recorded in April.

An increase in value added tax (VAT) to 12 percent from 8 percent with immediate effect is among the key tax increases announced on Tuesday, which is expected to boost government revenues by 65 billion Sri Lankan rupees ($180.56m).

Other measures, including increasing corporate income tax to 30 percent from 24 percent from October, will earn an additional 52 billion rupees ($143.46m) for the exchequer.

Withholding tax on employment income has been made mandatory and exemptions for individual taxpayers have been reduced, the statement said.

The island nation of 22 million people has been battered by its worst economic crisis since independence from Britain in 1948, with a severe shortage of foreign currency stalling imports of essentials, including food, fuel and medicines.

The roots of the crisis lie in tax cuts enacted by President Gotabaya Rajapaksa in late 2019, which came months before the COVID-19 pandemic that battered the country’s lucrative tourism industry and led to a drop in foreign workers’ remittances.

The tax cuts caused annual public revenue losses of about 800 billion rupees ($2.2bn), the prime minister’s office said in its statement.

The new tax regime and COVID-19’s impact, together with the pandemic relief measures, widened the budget deficit significantly to 12.2 percent of gross domestic product (GDP) in 2021 from 9.6 percent of GDP two years earlier.

In an interview with the Reuters news agency this month, Wickremesinghe – who also holds the finance ministry portfolio – said he would cut expenditures down “to the bone” in the upcoming interim budget and reroute funds into a two-year relief programme.

The tax hikes are aimed at putting public revenues back at pre-pandemic levels and focused on fiscal consolidation as the country seeks a loan package from the International Monetary Fund (IMF), said Lakshini Fernando, a macroeconomist at investment firm Asia Securities.

“The tax increases are definitely a very positive first step, especially for IMF talks and debt restructuring,” Fernando said.

“This was required to take forward discussions and will also help the government in talks with bilateral and multilateral partners to secure more funding,” Fernando said.

SOURCE: REUTERS

New Army Commander Lieutenant General Vikum Liyanage Assumes Duties

Lieutenant General Vikum Liyanage, who was appointed as the 24th Army Commander, assumed duties on Wednesday (1) at the Army Headquarters.

President Gotabaya Rajapaksa in his capacity as Commander-In-Chief of the Armed Forces promoted Vikum Liyanage to the rank of Lieutenant General, effective from 1st June 2022.

Lieutenant General Vikum Liyanage as the 24th Commander of the Army replaced General Shavendra Silva who has now been appointed the Chief of Defence Staff.

The formal relinquishment of office of the 23rd Commander of the Army General Shavendra Silva, who has now been appointed as the Chief of Defence Staff took place last afternoon (31) at a simple formality where the outgoing Commander symbolically handed over the authority, Sword and the Truncheon to his successor.

The gesture that took place at the office of the Commander of the Army signified the transfer of command in the military way to the incoming Army Chief of the Gajaba Regiment.

The glittering replica of the Sword, crafted with gold and silver colour with a seven-headed lion, called ‘serapendia’ symbolizes the Command and other parts reflect natural laws, respect and dignity for profession, protection of the nation, religions, culture, and the State.

The ornamental Truncheon represents the commanding authority that can only be held by an incumbent Commander of the Army. Both these symbolic replicas signify the significance of the office of the Commander of the Army and the authority it commands over the organization for the best interests of the country.

Who is the new Army Commander?

Lieutenant General HLVM Liyanage RWP RSP ndu has been appointed as the 24th Commander of the Sri Lanka Army, effective from 01 June 2022 by the President Gotabaya Rajapaksa in his capacity as the Commander-in-Chief of the Armed Forces after he was elevated to the rank of Lieutenant General with effect from the same date.

Lieutenant General HLVM Liyanage, more popularly known as Vikum Liyanage, prior to his new appointment was serving as the Chief of Staff of the Sri Lanka Army. He is the most Senior Officer in the Army as at present next to the outgoing Commander.

Lieutenant General Vikum Liyanage as an Officer Cadet joined the Regular Force of the Sri Lanka Army on 27 October 1986 in the Regular Intake – 26 and followed basic military training at the prestigious Sri Lanka Military Academy at Diyatalawa and subsequently at Pakistan Military Academy. Upon successful completion of Officer Cadet training, he was commissioned in the rank of Second Lieutenant and was posted to the Gajaba Regiment.

During his 35 years of illustrious military career, he has held a number of significant command, staff and instructional appointments, including Platoon Commander, Company Commander and Adjutant of 4th Gajaba Regiment. In the Eastern theatre of operations, Lieutenant General Vikum Liyanage performed a commendable role contributing to the eradication of terrorism from the region. He was also the Intelligence Officer of 21 and 55 Infantry Divisions, Second in Command of 14th Gajaba Regiment, Adjutant of General Sir John Kotelawala Defence University, Staff Officer II (Admin) at Regimental Centre of the Gajaba Regiment, Second in Command of 10th Gajaba Regiment, Staff Officer II at Directorate of Staff Duties, Commanding Officer of 8th Gajaba Regiment during which Lieutenant General Vikum Liyanage with his troops in the ‘rice bowl’ of Mannar made progress and advanced into terrorist-held areas in impressive operations.

Brigade Commander (Overlooking) of 225 and 553 Infantry Brigades, Sector Commander at Operations Command Colombo, Brigade Commander of 215, 542, 224, 221 and 623 Infantry Brigades, Director (Doctrine & Training) and Director (Operations & Systems) at the Office of the Chief of Defence Staff (OCDS), Commandant of Combat Training School (Ampara), Director General of Psychological Operations, General Officer Commanding of 21 Infantry Division, Commander Security Forces – West, Commander Security Forces – Central, Colonel of the Regiment of Sri Lanka National Guard, Commandant, Sri Lanka Army Volunteer Force and the Chairman of Sri Lanka Army Wushu Committee.

Lieutenant General Vikum Liyanage was able to widen his horizons through the experience gained over the years from respective appointments in his office and through further training he underwent. He has successfully followed a number of local courses, including the Internal Security/ Counter-Revolution Warfare Course at Army Training School (Maduru Oya), Method of Instructions Course at Sri Lanka Military Academy, Forward Observation Officer Course at School of Artillery (Minneriya), Battalion Support Weapon Course at Infantry Training Centre (Minneriya), Platoon Commanders’ Refresher Course at Army Training School (Maduru Oya), Company Commanders’ Refresher Course at Army Headquarters, Unit Security Officers’ Course at Military Intelligence Corps, Management & Leadership Development Course at General Sir John Kotelawala Defence University, Basic Mediation Skills & Process (UNHCR) course at 21 Division and Multinational Platoon Exercise-3 at Kukuleganga.

To his credit, he has also followed many overseas courses, workshops and seminars of professional value, including Officers’ Physical Training Course in India, Young Officers’ Course in Pakistan, Junior Command Course in India, Unit Commanders’ Course in Bangladesh, Senior Command Course in India, Advanced Security Cooperation Programme in Hawai and Regular Education Programme at National Institute of Lemhannas in Indonesia.

Further, he holds a Masters’ degree in Strategic and Resilience Studies from Lemhannas University, Indonesia and a degree on ‘Global Security in Indo-Pacific Region’ from Asia-Pacific Centre for Security Studies in Hawai. In addition, he has received a Diploma in Defence Management from the University of Indore in India.

During the peak of the final humanitarian operation, General Vikum Liyanage commanded the 8 Gajaba Regiment of victorious 57 and 56 Divisions which were actively conducting operations. He was able to achieve many victories against the LTTE. Over and above, Lieutenant General Vikum Liyanage who has actively taken part in operations against the LTTE has been adorned with gallantry awards of Rana Wickrama Padakkama (RWP) for individual or associated acts of bravery in the face of the enemy and performed voluntarily. He was also decorated with the Rana Sura Padakkama (RSP) for distinguished conduct in the face of the enemy. The Senior Officer was awarded above medals thrice during his military career for being a pioneer in eradicating terrorism during North and East Humanitarian Operations. Further, he is a recipient of Desha Puthra Padakkama for being wounded whilst on operations due to enemy action. Lieutenant General Vikum Liyanage has also received service decorations such as East Humanitarian Operation Medal, North Humanitarian Operation Medal, Purna Bhumi Padakkama, North and East Operation Medal, Riviresa Campaign Service Medal, 50th Independence Anniversary Commemoration Medal, Sri Lanka Army 50th Anniversary Medal, Long Service Medal, Seva Abhimani Medal and Service Medal.

During his school career, he shone in athletics and hockey as a bright student and received accolades for the school, Vijaya College in Matale.

Similarly, the honorary title of ‘Janamanya Vibhutiratna’ in the Buddhist Monastic Order of Amarapura Chapter was conferred in recognition of his immense contribution for fostering of the Buddha Sasana. He is married to Mrs. Janaki Liyanage and blessed with a daughter and a son.

Economic crisis: Muslims in SL to abstain from Hajj pilgrimage

Sri Lankan Muslims have decided not to take part in Hajj pilgrimage this year, after taking into account the ongoing economic crisis in the country.

Saudi Arabia had approved a quota of 1,585 Hajj pilgrims from Sri Lanka for the year 2022, out of the 1 million foreign and domestic Muslims allowed to travel the holy city of Makkah in the pilgrimage season.

However, it was decided not to any devotees on Hajj pilgrims this time following a discussion held by several parties including the National Hajj Committee, Hajj Tour Operators Association and the Muslim Religious and Cultural Affairs Department.

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Sri Lanka Supreme Court orders arrest of pardoned murder convict Duminda Silva

Sri Lanka’s Supreme Court has ordered the Criminal Investigation Department (CID) to arrest former parliamentarian and murder convict Duminda Silva, effectively nullifying a presidential pardon granted to him a year ago, the privately-owned NewsFirst reported on Tuesday (31).

A travel ban has also been imposed on the former MP while the Attorney General has been directed to assist the CID in his arrest, NewsFirst reported.

Silva, who was serving a death sentence over murder charges, was released from prison on a “special presidential pardon” in June 2021 along with 93 prisoners including 16 ex-Tamil Tiger combatants.

He and two others were sentenced to death over the murder of former MP Bharatha Lakshman Premachandra in 2011.

The presidential pardon of Silva and his subsequent release from prison were widely condemned.

The Bar Association of Sri Lanka (BASL) said after his release that, if certain considerations regarding the pardon were not satisfied, the pardon would result in “erosion to the rule of law and result in a loss of public confidence in respect of the administration of justice”.

The United Nations High Commissioner for Human Rights (OHCHR) said was “typical of arbitrary pardoning that serves to weaken the rule of law”.

“President Gotabaya Rajapaksa’s recent pardons highlight the need for genuine rule of law in Sri Lanka, not favours to friends or blatantly cynical measures to keep trade preferences,” the Human Rights Watch said in a statement.

21A: SLPP divided, Sarath W takes clear stand against it

SLPP lawmaker Rear Admiral (retd.) Sarath Weerasekera has declared that he will not vote for the proposed 21 st Amendment to the Constitution under any circumstances.

The former Public Security Minister and Colombo District lawmaker said he couldn’t accept the 21st Amendment as it was meant to restore the provisions in the treacherous 19th Amendment to the Constitution enacted in 2015.

MP Weerasekera said so at a meeting chaired by President Gotabaya Rajapaksa on Monday (30) evening at the President’s House to reach a consensus on the proposed Amendment.

Among those who had been present at the discussion were Prime Minister Ranil Wickremesinghe, former Prime Minister Mahinda Rajapaksa, SLPP founder Basil Rajapaksa, MP, members of the cabinet and members of Parliament.

At the onset of the meeting, Justice Minister Dr. Wijeyadasa Rajapakse, PC, has briefed the gathering of the proposed Amendment meant to do away with the 20th Amendment enacted in Oct 2020.

Lawmaker Weerasekera asked how he could accept 21 Amendment after having voted against the 19th Amendment that sought to empower the Premier at the expense of the President.

The former Navy Chief of Staff has questioned the move to amend the constitution, hastily in response to essentially an economic crisis. The former minister said that he kept quiet in spite of the appointment of a new Prime Minister along with cabinet of ministers. However, a blind eye couldn’t be turned to the controversial moves to bring back provisions of the 19th Amendment, MP Weerasekera said. The nationalist warned that enactment of 21 meant the betrayal of 6.9 mn people who exercised their franchise in support of wartime Defence Secretary Gotabaya Rajapaksa at the Nov 2019 presidential election and the SLPP at the subsequent general election in August 2020.

MP Weerasekera asked how President Gotabaya Rajapaksa could hand over executives powers bestowed on him at a national election to a person who represented Parliament with just one vote there. The ex-minister urged the grouping to take into consideration the President had been elected whereas the PM was selected.

Lawmaker Weerasekera emphasized that President Gotabaya Rajapaksa couldn’t follow a course of action contrary to that of his overwhelming mandate.

President Gotabaya Rajapaksa last month invited UNP leader Ranil Wickremesinghe to accept premiership in the wake of violent protests demanding the resignation of both the President and Premier Mahinda Rajapaksa, who quit on May 09.

The main Opposition Samagi Jana Balavegaya, the JVP and the BASL are still pushing for the abolition of the executive presidency.

MP Weerasekera, who transformed the Civil Defence Force from a ragtag outfit into a fighting arm during the war also questioned the status of the draft Constitution prepared by a 9-member expert team led by President’s Counsel Romesh de Silva. The Navy veteran said that Gotabaya Rajapaksa received a mandate to enact a new Constitution. Therefore, a constitutional amendment couldn’t be brought into appease those bent on working against the wishes of the people.

However, several lawmakers, including Harin Fernando, Charitha Herath and Nimal Lanza backed the 21 Amendment. They strongly endorsed the proposed amendment that has received the backing of a wider section of the public. However, the BASL insists the amendment in its present form didn’t meet the aspirations of those demanding the restoration of democratic governance.

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Trinco Port to be devloped as industrial harbour

Expressions of interest have been called from private investors to develop the Trincomalee Port as an industrial port, Sri Lanka Ports Authority (SLPA) Chairman Prasantha Jayamanne said today.

“There are 2400 hectares of land in Trincomalee Port and we have called for expressions of interest from the potential investors to develop it as an industrial port. We are mainly focusing on local investors,” Jayamanne told a press conference.

At the same time Mr. Jayamanne and heads of private terminals and a major stakeholder Ceylon Association of Shipping Agents claimed that Colombo Port is functioning smoothly despite the FOREX issue.

“We have decided to allow local customers who face issues to make payments in rupees instead of dollars,” he said. The SLPA earlier notified all customers to make payments in dollars. He said this concession will be given to local customers only.

Ceylon Association of Shipping Agents (CASA) Chairperson Shehara de Silva said the member companies of the association had not received any complaint about the port to date.

“Colombo Port is not about container distribution but other services are also carried out by it,” she said.

Chief Operating Officer South Asia Gate Terminal (SAGT) Romesh David said the Port and the SAGT are functioning smoothly despite minor setbacks.

SLPA claimed that Colombo Port had achieved a 4.3% growth in terms of TEU (containers and a 5% growth in transshipment in 2021 and the SLPA Chairman assured that the Port will achieve a growth this year as well.

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21A will not abolish Executive Presidency -FSP

The Frontline Socialist Party charges that the draft 21st Amendment to the Constitution will not abolish the Executive Presidency.

Education Secretary Pubudu Jagoda speaking during a media briefing yesterday said requests for ‘Gota to go home’ will not be fulfilled as a result.

He said the 21st Amendment is a mere effort to secure power for those already in power, and is a deal between each other that will undermine the power of the people.

Jagoda said the people are calling for the individual they elected to power, to be sent home without having to wait for five years.

He charged that people have no faith in Parliament, and the political and party system claiming the people believe that there is no true public representation in these bodies.

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Five-point assistance from China to overcome crisis

Chinese Ambassador Qi Zhenhong highlighted a five–point assistance from China to Sri Lanka in view of the economic crisis, fast-track ongoing projects and more FDI (Foreign Direct Investment) and Trade, bilateral debt settlement, support to Sri Lanka in its talks with the International Monetary Fund (IMF) and regarding International Sovereign Bonds and tourism after Covid, a statement from the Embassy said.

He, along with his spouse Jin Qian started their three-days visit to the Eastern Province of Sri Lanka on May 24 from Trincomalee. They are grateful to receive a warm welcome by Governor Anuradha Yahampath and children from different backgrounds.

Ambassador Qi and Ms. Yahampath co-chaired a business forum with the Chinese Business Chamber representatives. China encourages more investment to Sri Lanka including EP to overcome current difficulties.

After the meeting, Ambassador Qi Zhenhong took a boat visit to the Trincomalee Harbour and China Bay.

The Sri Lankan Ports Authority and the Eastern Province invite Chinese investment to the port-related industries and tourism.

To support low-income families to overcome difficulties, Ambassador Qi handed over food packs (Rs. 5200 each) donated by the people of Yunnan Province of China to Trincomalee, Batticaloa and Ampara Districts.

In total, 10,400 underprivileged families in the Eastern Province of Sri Lanka have received the support from the people of Yunnan.

Ambassador Qi Zhenhong and Madam Jin Qian also donated a batch of sports equipment supporting local youth in Kalmunai.

On May 26, Ambassador Qi visited the Kayakerni archaeological site where the China sherd of the China Song Dynasty (960–1279), the glass from ancient Europe and the stone bridge uncovered show that Sri Lanka’s eastern coast has always been an important global trade hub on the Maritime Silk Road.

During his visit, Ambassador Qi visited the Kuchchaveli Pichchamal Viharaya.

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Cabinet approves supplementary budget of Rs. 695 Bn

Sri Lanka’s Cabinet of Minister approved the proposal to to submit a supplementary estimate to the Parliament for the provision of Rs. 695 billion under the “Budget Assistance Services and Emergency Responsibilities” project of the National Budget Department.

The proposal was made by the Prime Minister in his capacity as Minister of Finance, Economic Stabilization, and National Policies, said the Department of Government Information.

“The government has introduced a assistance package for Samurdhi Beneficiaries, Estate Communities, Pensioners and Government Servants at the beginning of 2022 to reduce the hardships faced by the public due to the adverse economic conditions,” said the Department in a statement.

The Department of Government Information noted that it was decided to submit a supplementary estimate to Parliament to cover the cost and secure the necessary funds to maintain the essential public services without hindrance.

Sri Lankan YouTuber and anti-government protestor Ratta arrested and granted bail

Social activist and Sri Lankan YouTuber Rathidu Suramya Senaratne, popularly known as “Ratta”, has been granted bail by the Fort Magistrate’s Court.

He was released on bail after being produced before the court, a short while ago.

Popular Sri Lankan YouTuber Rathindu Suramya Senarathna, also known as Ratta, was arrested Monday (30) for allegedly obstructing the duties of police officers during a protest in front of the Fort Magistrate Court on Thursday (25), police said.

The protest had taken place demanding the arrest of suspects allegedly connected to the Black Monday violence by government supporters on peaceful protestors on May 09.

Ratta, who has 1.4 million subscribers on YouTube, was a prominent figure in Sri Lanka’s anti-government protests demanding the resignation of President Gotabaya Rajapaksa and his government over the country’s worsening economic crisis. While his usual content focused on comedy and satire, he has been using his platforms to share information regarding the protests since they began.

According to fellow protestor and civil activist Shehan Malaka, Ratta was summoned to courts a few days ago. “He went to give his statement today, and after he did, the police arrested him.”