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Parliament

Ninety MPs in favour, 25 against, 109 absent :

Inland Revenue Bill passed

The Inland Revenue Bill was passed with a majority of 65 votes in Parliament yesterday incorporating more than 100 amendments.

The Bill replaces the Inland Revenue Act No 10 of 2006. Following a division called by the Opposition, 90 MPs voted in favour whereas 25 MPs voted against. 109 MPs were absent at the time of voting that was taken using newly installed electronic voting system. UNP, SLFP members in the Government voted in favour, whereas the JVP and the JO voted against. The TNA MPs were not in the chamber when the final vote was taken.

Prior to that, the second reading of the Bill was passed with a majority of 59 votes. The Bill received 100 votes for and 41 against, while 83 members were absent at the time of the voting. The UNP, SLFP members in the Government and the TNA voted in favour, whereas the JVP and the JO voted against.

Finance and Mass Media Minister Mangala Samaraweera read out Amendments to the Bill at its third reading, which took about 2 hours. All the Clauses the Supreme Court determined were inconsistent with the Constitution were revised as per the SC ruling.

The Joint Opposition came up with 31 Amendments and the JVP came up with 70.

The Government refused to accommodate some of them on the grounds that it is against the Standing Orders to include any Amendment that had not received the Cabinet approval. However, some of the proposals of the Opposition had already been included into the Amendments presented by the Government. Minister Samaraweera agreed to study all the other Amendments proposed by the JO and the JVP and bring in a separate Amendment Bill before long accommodating what is agreeable to the Government.

Finance State Minister Eran Wickramaratne pointed out the new legislation has restricted the space for ministers to meddle in the affairs of taxes.

He insisted that no additional tax would be levied from places of worship.

He added that the tax exemptions hitherto granted to them would remain and implied that more tax concessions for the SME sector and other needy sectors would be announced in the upcoming budget.

He added that the Share Transactions Levy imposed on the Stock Market transactions would remain unchanged and the Capital Gains Tax would not apply to those transactions.

The State Minister clarified that provisions of the Bill related to corporate sector would come into effect only from April next year.


 

New Inland Revenue Bill is far simpler: Samarawickrama

“The proposed new Act, overall, is far simpler from the standpoint of the taxpayers. It will increase the tax base, make administration of the Inland Revenue Department more efficient and will increase Government revenue collection,” Development Strategies and International Trade Minister Malik Samarawickrama said.

He added that an efficient and effective tax code is a dire necessity for the vision of the Government to transform the economy into a competitive social market economy with a prosperous future for the nation.

He made these observations in Parliament yesterday joining the second reading debate on the Inland revenue Bill.

The Minister said the existing Act was outdated, which had gone through many amendments. “It is complex, difficult to understand and implement,” he said.

“Sri Lankan economy has come from a low income country to a middle income level. As in the case of many legislative enactments, the existing Inland Revenue Act too has evolved over four decades or more and stands outdated. Even the principal enactment of 2006 has gone through nine amendments by now. These were piecemeal amendments done to address issues and concerns that arose at different circumstances and without any holistic review or appreciation of possible implications. The Act itself has become a very complex, difficult to understand and confusing. It has created loopholes and opportunities for many to escape the tax net and thereby creating a very unfair playing field,” the Minister said.

“As a result, Sri Lanka lags behind its peers in Ease of Doing Business in view of the existence of very complex tax law,” Minister Samarawickrama said. “This has made tax payment very difficult, costly and time consuming. Both local and foreign businesses find the Inland Revenue Act as a serious impediment that requires immediate change. The new bill looks at the issue of taxation from a novel and modern perspective and meeting the current status of our economy. It is a simple, easy to understand and it encourages compliance by all rational tax payers,” he said. He said another major concern was the gradual and consistent deterioration of government revenue in Sri Lanka which was falling way behind compared with the peer economies. He added that there is also serious disparity between the direct and indirect proportions; which stands at 20:80 ratio today.

“While government revenue is consistently dropping, the expenditure has consistently grown thus creating an inevitable deficit, with cascading implication to the economy. It is a vicious cycle and we must stop this and resurrect the situation. The new IR bill looks at the entire tax code in a holistic manner, with the multiple (composite) objectives of reducing the unfair proportionality between direct and indirect tax - our aim is to move towards 60:40 ratio by 2020, increasing the tax base and thereby increasing the tax revenue,” Minister Samarawickrama said.

“The simplification of the tax code will not only make it easy to understand but also result in better compliance and enhanced administrative efficiency. The new IR bill and the RAMIS (Revenue Administration Management System) will undoubtedly improve efficiency of the tax authorities. RAMIS without a cleaner, clearer and simplified tax code would have been a ‘non-started’ and a disaster, wasting colossal amounts of public money,” he said.

He said the principal features aimed at achieving overall increase in tax collection, better compliance and administrative efficiency were simplification through reduction of sources of income: the sources of income, which are currently divided into eight areas, have been reduced to four main sources thus simplifying the computation of tax. “Another is removing imbalance in revenue collection through the introduction of capital gains tax: the introduction of capital gains tax, subject to certain exemptions, to capture high-value transactions will remove and imbalance in revenue collection by taxing the rich. Such taxes were not levied in the past allowing capital formation within the local economy and the Government is now of the view that it is the right time to introduce such taxes to remove the unfair imbalance. Since the appreciation of the value of capital, in the form of shares in companies or land and buildings is largely due to improvement in economic fundamentals year-on-year, there is justification to tax part of that gain as income tax for the greater benefit of the people,” Minister Samarawickrama said. “Another is absence of level playing field: the tax exemptions and incentives in the current law have evolved over the years and were not targeted towards increased economic development.


Intake of external degree students will be doubled: Kiriella

Highways and Higher Education Minister Lakshman Kiriella said the Government has decided to double the intake of the students for external degree courses.

The Minister said in Parliament yesterday that the government decided to increase the number of students for external degrees to tally the students following the internal degree courses.

The Minister made these observations making an explanation to an answer he tabled in Parliament in response to a question raised by Joint Opposition member Dullas Alahapperuma for oral answers.

Generally, during the first round of questions if the member who submitted a question to the order paper was present in the House, the relevant minister would answer to orally. If a member raising the question was not present, it was left for the second round of question. During the second round, if another member raises the question on behalf of the member who submitted the question, the minister tables the answer.

When Minister Kiriella made an explanation, Chief Opposition Whip Anura Kumara Dissanayake argued with Speaker Karu Jayasuriya for he did not stop him making the explanation. “You can’t allow a minister to talk about an answer for oral question during the second round of the oral question session as per the standing order,” MP Dissanayake said.

“ Don’t criticise me as the minister only wanted to make a clarification. It has nothing to do with the oral question,” the speaker said.

MP Dissanayake said the Speaker should allow others to raise their questions too.

“The Minister made only an explanation,” the Speaker said. “He requested to do so and said what is not in the answers.”

Minister Kiriella said only the minister has the right to decide on answering an oral question. Joint Opposition Member Vasudeva Nanayakkara said that the Minister could make an explanation if he wishes.


Budget 2018 will be presented on November 9

The Budget proposals for the fiscal year 2018 will be presented to Parliament on November 9, Finance and Media Minister Mangala Samaraweera said in parliament yesterday.

The second reading of the budget will begin on November 10.

Minister Samaraweera said views and proposals of MPs are being discussed. “A discussion of the government side members will be held at 9 am today (8) in the parliamentary complex,” Minister Samaraweera said. “I invite the Joint Opposition members to take part in the discussion and express their views and proposals.”


JO, JVP amendments to Inland Revenue (Amendment) Bill:

Cabinet already approved many of them as Government’s amendments: Mangala

Finance and Mass Media Minister Mangala Samaraweera stated in Parliament that many of the amendments made by the Joint Opposition and the Janatha Vimukthi Peramuna had been granted Cabinet approval as government’s own amendments.

He said he studied the amendments submitted by the opposition and many of them had been granted Cabinet’s approval even before Opposition submitted them. He said there would be no any issue with passing the Bill.

The Minister made these observations yesterday afternoon in Parliament in response to a request made by the Joint Opposition in the morning to allow their group to bring in amendments to the Inland Revenue (Amendment) Bill.

Minister Mangala Samaraweera stated that he had no any objection in the JO making their submission. He added that the government could consider them and accept if they were suitable. The statement was made when Joint opposition parliamentary group leader Dinesh Gunawardene, who raised the issue, said they have received a letter from the Government saying it was not possible to bring in amendments during the committee stage as per the standing orders. “This is a violation of MPs’ rights. What has happened to the parliamentary democracy,” he questioned.

Leader of the House Lakshman Kiriella, who responded, said Cabinet approval was needed to bring in amendments to a financial bill. MP Gunawardena said there was no Act yet as the Bill had not been passed. “So we can submit our amendments,” Gunawardena said.

Minister Mangala Samaraweera said the opposition was welcome to bring in amendments during the committee stage. “ You bring your amendments and we can agree or disagree during the committee stage,” he said.


 

 

‘UNHRC called for action over Fonseka’s statement on Gen. Jayasuriya’

Joint Opposition Parliamentarian Dullas Alahapperuma yesterday said the UNHRC had called for an immediate action with regard to the statement made by Field Marshal Sarath Fonseka on General Jagath Jayasuriya that the General committed war crimes during the war against the LTTE.

He was addressing a press conference held at the Parliamentary Complex yesterday.

He said the LTTE’s international organisation has already applauded Field Marshal Fonseka’s statement on General Jayasuriya. He added that the UNHRC has stated that immediate action should be taken on the statement made by Fonseka.

“This is a serious situation,” MP Alahapperuma said. “The President says he will not permit any harm to the war heroes, but the harm is done by a minister appointed by the President.” MPs Udaya Gammanpila, Vasudeva Nanayakkara, Prasanna Ranatunga, and Keheliya Rambukwella addressed.


 

SP Chief Minister uses 14 vehicles: UNP MP

Kegalle District UNP MP Sandith Samarasinghe brought to the notice of Parliament yesterday that the Chief Minister of Sabaragamuwa Province uses 14 official vehicles violating the provisions of government circulars with regard to the use of official vehicles. MP Samarasinghe made the revelation raising a supplementary question during the round of questions for oral answers from Provincial Councils and Local Government Minister Faizer Mustapaha.


 

HC verdict on ‘sil clothes’:

Eye opener to public officials: Bimal

The High Court verdict on the ‘Sil cloth’ distribution case is a historical decision that sends out a strong signal to public officials who misuse public funds and act as political lackeys, JVP MP Bimal Rathnayake said in Parliament yesterday.

The MP made this comment while speaking at the debate of Inland Revenue Bill shortly after the news broke on the court sentencing former Secretary to the President Lalith Weeratunge and former Telecommunication Regulatory Commission (TRC) Director General Anusha Pelpita to three years rigorous imprisonment with a fine of Rs. 2 million each.

“This is a wake-up call to all other senior public officials to work with backbone. Today Lalith Weeratunge goes to jail as a former Secretary to the President who tarnished his name.

We, in the COPE, come across officials who misuse their power even today. Today’s ruling will send a strong signal to such officials and also to politicians who rob the tax payers’ money,” he stressed.

The MP commenting the judgement delivered yesterday said it was wrong to argue such punishment could affect public officials.

“Only less than 10 percent of the public officials are corrupt.The majority is clean, but they also earn the bad name due to the wrongs of a few persons” he added.

The MP pointed out former President Mahinda Rajapaksa, for whose election campaign the Sil clothes were distributed, easily got away with the charges because of the constitutional cover he enjoys.


Inland Revenue Bill designed to tax everyone: Handunnetti

The Inland Revenue Bill had been designed to collect tax from everyone in the country, Janatha Vimukthi Peramuna Parliamentarian Sunil Handunnetti said in Parliament yesterday.

He said the bill was so harmful to the people that the Government should include the amendments submitted by the Opposition. He said the new bill proposed to collect taxes from the areas where the previous one had not collected.

He made the observations joining the second reading on the Inland Revenue Bill.

MP Handunnetti said the bill had been drafted by the IMF for Ghana and had been translated into Sinhala. “We agree that the Government has made changes. But we have submitted our amendments . The indirect tax is 82 percent. The Premier said in his policy statement on November 5 that the indirect tax should be reduced to 60 percent. But it has proved a failure although you introduced super gain taxes through the budget proposals,” Handunnetti said. “Although they were not collected, the indirect tax was collected.

“It affected only the common people.”

He stated that over 43 percent of the population does not get over Rs 320 a day. “The Bill has proposals to impose a tax on the dowry, on transfer of assets from parents to children,” Handunnetti said.

“If some one get a donation or a gift from the President’s Fund, that money also will be taxed. Writers when they publish books are taxed, A drama producers, singers and other artistess would be taxed,” he said.

Minister Mangala Samaraweera responding to Handunnetti said a tax was not imposed on the assets transferred to children from deceased parents and on transfers among blood relations.

MP Handunnetti said the salaries sent to Sri Lanka by overseas workers would be taxed. Minister Eran Wickramaratne responding said income of the migrant workers in the Middle East was not taxed.

The Minister added that an income of US$ 100,000 a year is not taxed from the Sri Lankans employed in other parts of the world.

MP Handunnetti stated the Bill has proposals to impose a tax on the donations made to Buddhist monks and priests. Even if a minister related to literature, art and sports make a donation less than Rs. 100,000 to someone, that money will be taxed. “But such money was not taxed earlier,” Handunnetti said.

“Even if a small group of neighbours set up a association in a village, they would be taxed if they earned some money,” he said.

 

 

 

 

 

 

 

 

 

 


 

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