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| Thursday, 15 August 2002 |
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PSMPA first ever in Asia do Sri Lanka proud Sri Lanka (then Ceylon) could be proud of donning the first ever Public Servants' unique financial institution in the Asian sector of then colonial British empire - the Public Service Mutual Provident Association (PSMPA) founded in 1883 and incorporated by Ordinance No. 5 of 1891, over 118 years ago with the objects of promoting thrift, granting relief in times of sickness and those in financial distress and to provide for widows and orphans of public servants. Initially free accommodation for its office was provided for over 50 years by then patronising Colonial administration realising its potentialities in affording many a meaningful welfare services to state employees. From 1933 office was accommodated in an ante-room in the prestigious Queens House until it was moved to Room 109 in the Galleface Secretariat and again to Port Commission premises in 1938 and came to be housed in then Imperial Bank of India from 1.9.1940 to this day. The first year's Income was a paltry Rs. 151.74 which in 2001 has swelled to an astromical Rs. 9,686,769, nett. First death was a meagre Rs. 162 but now a tidy Rs. 50,000 entitled to a deceased member's widow/heirs. Presently total liquid Assets stands at a startling figure of over Rs. 253 million. Eminent personalities in Civil, Administrative, Medical, Engineering, Accountancy, Clerical and allied services have been our reputed members but the most distinguished among them was former Governor General late Sir Oliver Goonetilleke who had joined the Association when he served as an Asst. Auditor General during the Colonial era, whose heirs have gifted his death donation to accrue to the Fund and acknowledged with Merit. Presently the Association is taxed on its Gross Income in par with social Clubs operating for the elite but not with such egalitarian motives. Considering the numerous welfare facilities afforded to State employees, which in fact is a responsibility of the authorities of the day, there is a strong opinion emerging that the Association be tax exempted and devote such funds to augment existing welfare facilities to hard-pressed public servants. W. SAMARANAYAKE,Maharagama
E.T.F. statements - 3 years delay I refer to the item published under the above caption by S. Ranasinghe (DN July 29). This is to inform the E.T.F. members that E.T.F. Board is making arrangements to finalize the Annual Member statements up to 31.12.2000 during this year. The present management is making an endeavour to bring everything up to date within the 1st half of the year I am surprised to find out that Mr. Ranasinghe has obtained his E.P.F. statements up to 31.12.2002 by July 2002. Asoki Wickramasighe -Manager (Benefit Administration). Employees' Trust Fund Board
Withholding Tax at the rate 10% on interest and dividends had been introduced with effect from 1st April 2002. Concessions have been granted to individuals to claim exemptions up to the limit of Rs. 6,000 per month. (I understand this limit has been increased to Rs. 12,000 now). Thus, they may range their deposits ensuring maximum tax benefits. However, the following matters require corrective action. (1) Limited Liability Companies Limited Liability Companies make deposits in banks and financial institutions. This interest is also liable for 10% withholding tax. It is surprising to note that the balance interest of 90% is liable for income tax with no credit being granted for the withholding tax deducted. Companies, which are liable at 30% - 35% Income Tax rates, are liable to pay extra 7.5% and 6.5% respectively on their interest income. If this anomaly is not rectified, limited liability companies may transfer their funds from banks and financial institutions to non withholding sources. It is reported that an amendment is necessary to permit credit for the 10% tax deducted. It is better to expedite same. Treasury bills All primary dealers who purchase Treasury Bills are supposed to receive their income net of withholding tax. However, this income is exempt in their hands under the Inland Revenue Act. Primary dealers sell these Treasury Bills in the secondary markets to individuals, approved Provident Fund associations, Limited Liability Companies etc. profit earned by the investors on Treasury Bills is liable to tax at present unless and amendment is passed to treat the tax withheld by the Central Bank as tax withheld on the investor in the secondary market. Income Tax for approved Provident Fund Associations is fixed at 10%. However, for individuals, it ranges from 10% - 35% . If the same individual deposits his money in the bank of financial institution, he could enjoy 0% - 10% tax rate by arranging his deposits. In future, individuals who make material investment in Treasury Bills will divert their deposits to banks and financial institutions to enjoy tax concessions. The participation of individuals in the Secondary Treasury Bill market will curtail materially. Public believe that profit earned on Treasury Bills in the secondary market is exempt from Income Tax. On that basis, individuals, Provident Fund Associations etc. may not pay the 1st quarterly tax for 2002/2003 on 15th August 2002. This will result in penalties being imposed on them. It is better for the Department of Inland Revenue to clarify this position to the public early. (3) Dividends It is regrettable that Public Quoted Companies suffer 10% slash in their investment income due to the imposition of withholding tax on Dividend income. In the past, dividends declared by Public Quoted Companies were received in full without any withholding tax. Therefore, investors who are also Public Quoted Companies enjoyed their tax free dividend income in full. Due to the imposition of withholding tax, this has been reduced by 10%. This has an adverse impact on the stock market. The Ministry of Finance and the Department of Inland Revenue should take corrective action to rectify these matters. S.R. BALACHANDRAN Council Member-The National Chamber of Commerce of Sri Lanka
Hambantota is again facing a threat of drought. Being in the Arid Zone with the lowest annual rainfall in the country droughts are common in the Hambantota District. It is the most expensive of the natural disasters and its impact on agricultural output, income levels, nutrition and health of the people is enormous. Policy-makers are aware of the short, medium and long term measures needed to address this problem. Measures such as drought preparedness, improved water management, new forecasting technologies, climate change mitigation restoration and maintenance of irrigation works and tanks and construction of more and better irrigation works are generally covered in the public debate which ensues when the country is drought stricken. But the need is for a practical set of measures to mitigate the effects of drought with the involvement of the people themselves. Telling people how to conserve water, how to harvest water, improved drought monitoring by the government to give timely information to the people to conserve water at the onset of a drought and improved water management eliminating water conflicts, in general are more effective measures. Emergency responses such as drought relief help but such measures create a dependent situation which will preclude people from developing the knowhow and capability to respond effectively to drought on their own. D. H. SATHISCHANDRA-Nugegoda.
Dengue may have not yet hit us or any of our family members, so we still don't feel the pinch but remember we read and hear of very sad deaths due to this. There have been times where the victim's family may blame the Doctors or the authorities for not taking proper care. We cannot blame these victims as I said it has to hit us to feel that anger rising in us. Since now the citizens are free to roam around in the country without the fear of war which plagued our country a few months back . Why not get together and fight this menace. I am sure this can be done easily if the authorities can come forward and spread a more effective campaign to fight this mosquito which mainly attacks during day light and it's our future generation (the schoolchildren) at risk. I am sad to say, even after a severe outbreak of this sort still I am to see the UCs MCs, Pradeshiya Sabhas, etc., dispatching their workforce to spray their respective areas under the above councils. Will some authority please come forward and help to curtail the spread right now before it reaches epidemic levels where more human lives will be taken in vain. As this is preventable!! S. WEERASINGHE -Pellawatte
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