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Tuesday February 7th, 2023

President’s power to perform duties of a cabinet minister questioned.

Minister Bandula Gunawardena is saying that according to the 19th amendment when there is no subject minister appointed the President can take over the powers of that portfolio.

Gunewardene was responding to questions at the Cabinet briefing yesterday.

He said that President Gotabaya Rajapaksa issued the extraordinary Gazette empowering the military forces to continue to assist in maintaining public order as the person responsible for national security and the Defence Minister based on information discussed at Security Council.

The confusion over the Defence portfolio first emerged at the swearing-in of the caretaker Cabinet of Ministers. In November as a post from President Gotabaya Rajapaksa’s Facebook page said that Prime Minister Mahinda Rajapaksa was appointed Defence Minister. However the final announcement of the Cabinet released by the President Media Division (PMD) did not include that portfolio under the PM or any other Minister. Chamal Rajapaksa was appointed State Minister of Defense.

According to the constitutional framework set out by the 19th amendment precludes the president from assigning any subject or function to himself, Legal Academic Gehan Gunatilleke says.

In a written response sent to economynext, Gunatilleke said that it is not possible for the current president to assign to himself any subject or function or claim to have any residual powers under the constitution.

He said there are four time periods to look to such as pre and post 19th amendment in order to understand the framework.

Explaining the Period 1, Pre-19 amendment the president could assign any subject/function to him/herself and Any subject/function not assigned to any other cabinet minister will be retained by the president (‘residual power’) according to article 44(2) of the pre-19A constitution.

And he said the Period 2, Post-19A and prior to General Election of 2015 the incumbent president (which was Maithripala Sirisena) could assign to himself any subject/function. But the above residual power was specifically removed, this was according to the revised article 42, 43 and 44 in the post-19A constitution and section 50 of the 19A Act

Looking into the Third Period which is after the General Election of 2015, President Sirisena could hold subjects/functions of defence, Mahaweli and environment as long as he held the office of president but he could not constitutionally hold any other portfolios, this was according to the section 51 of the 19A Act

Finally considering the fourth Period which is after the 2019 Presidential Election any new president cannot assign to himself any subjects/functions and he will not have residual power but will remain the head of Cabinet.

However, Gunatilleke said that the president may have powers that are specifically vested in him by statute. For example, the Public Security Ordinance continues to vest in the president certain powers relevant to public security, including the power to call out the armed forces to exercise police powers.

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Sri Lanka Railways to seek PPPs to boost revenue streams

CURFEW RUSH: Commuters scrambling to get home after curfew was declared in Sri Lanka on March 20, 2020.

ECONOMYNEXT – Sri Lanka Railway department hopes to expand Public Private Partnerships and earn more non-passenger revenues to offset recurring operational costs, an official said.

“For the past 10 years, except the last few years, the Railway operational income only covers around 50 percent of the operational expense of the Department,” the General Manager of the Railway, D.S. Gunasinghe told EconomyNext.

“Our plan is to increase the non-passenger revenue of the Railway department.

“And we cannot expect and do not hope for money from the government.”

Sri Lanka Railways already has agreements with Prima, a food firm, and Insee Cement, which is bringing in additional income, Gunasinghe said.

“We had agreements for material transportation such as sand in the past, however it was canceled but we hope to start it again” he said.

The department will rent out its storage facilities and circuit bungalows for the tourism sector to create additional revenue streams.

Sri Lanka Railways recorded an operating loss of 10.3 billion rupees during 2021, compared to a loss of 10.1 billion rupees in 2020, the Central Bank 2021 annual report showed.

The total revenue of the SLR stood at 2.7 billion rupees, a 41.3 percent drop from a year ago.

(Colombo/ Feb 06/2023)

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Sri Lanka’s doctors distribute anti-tax hike leaflets to train commuters

ECONOMYNEXT – Doctors representing Sri Lanka’s Government Medical Officers Association (GMOA) distributed leaflets outside the Colombo Fort railway station against a progressive tax hike, threatening to address the government in a “language it speaks”.

GMOA Secretary Haritha Aluthge told reporters outside the busy Fort railway station Monday February 06 afternoon that all professional associations have collectively agreed to oppose the personal income tax hike.

“The government is taking a lethargic approach. They cannot keep doing this. They have a responsibility towards the citizens, the country and society,” said Aluthge.

The medical officer claimed that the government was acting arbitrarily (අත්තනෝමතික).

“If it cannot understand the language they’ve been speaking, if the government’s plan is to put all professionals out on the street, if it doesn’t present a solution, all professional unions have decided unanimously to address the government in a language it speaks, ,” he said.

Aluthge and other GMOA members were seen distributing leaflets to commuters leaving the railway station. Doctors in Sri Lanka in general are likely to earn higher salaries than the average train commuter, and a vast majority of Sri Lanka’s population, most of whom take public transport, don’t fall into the government’s new tax bracket. Many doctors, though certainly not all, collect substantial sums of money at the end of every month as doctor’s fees in private consultations.

About two miles away from the doctors, the Ceylon Blank Employees’ Union, too, engaged in a similar distribution leaflet campaign on Monday at the Maradana railway station. A spokesman promised “tough trade union” action if there was no solution offered by next week.

Sri Lanka’s cash-strapped government has imposed a Pay As You Earn (PAYE) tax on all Sri Lankans who earn an income above 100,000 rupees monthly, with the tax rate progressively increasing for higher earners, from 6 percent to 36 percent.

A person who paid a tax of 9,000 rupees on a 400,000 rupee monthly income will now have to pay 70,500 rupees as income tax, the latest data showed. This has triggered a growing wave of anti-government protests mostly organised by public sector trade unions and professional associations.

Even employees of Sri Lanka’s Central Bank recently joined a week-long “black protest” campaign organised by state sector unions against the sharp hike in personal income tax, even as Central Bank Governor Nandalal Weerasinghe said painful measures were needed for the country to recover from its worst currency crisis in decades.

The government, however, defends the tax hike arguing that it is starved for cash as Sri Lanka, still far from a complete recovery, is struggling to make even the most basic payments, to say nothing of the billions needed for public sector salaries.

Economists say Sri Lanka’s bloated public service is a burden for taxpayers in the best of times, and under the present circumstances, it is getting harder and harder to pay salaries and benefits.

Sri Lanka’s new tax regime has both its defenders and detractors. Critics who are opposed to progressive taxation say it serves as a disincentive to industry and capital which can otherwise be invested in growth and employment-generating business ventures. Instead, they call for a flat rate of taxation where everyone is taxed at the same rate, irrespective of income.

Others, however, contend that the new taxes only affect some 10-12 percent of the population and, given the country’s economic situation, is necessary, if not vital, at least for a year or two.

Critics of the protesting workers argue that most of the workers earn high salaries that most ordinary people can only dream of, and, they argue, though there may be some cases where breadwinners could be taxed more equitably, overall, Sri Lanka’s tax rates remain low and are not unfair.  (Colombo/Feb06/2023)

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Sri Lanka bond Yields end steady

ECONOMYNEXT – Sri Lanka’s bond yields closed steady on Monday, dealers said while a guidance peg for interbank transactions remained unchanged.

A bond maturing on 01.07.2025 closed at 32.15/30 percent, steady from Friday’s 32.05/10 percent.

A bond maturing on 01.05.2027 closed at 28.90/29.10, steady from Friday’s 28.90/20.05 percent.

The Central Bank’s guidance peg for interbank US dollar transactions appreciated by one cent to 361.96 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 370.35 rupees on Monday, data showed. (Colombo/Feb 06/2023)

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