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Monday April 22nd, 2024

Sri Lanka above 18 voters should open tax files – State Minister

ECONOMYNEXT – Sri Lankan citizens aged more than 18 years will have to open tax files because they chose the country’s leaders by voting, which influence country’s policies, State Minister of Higher Education Minister Suren Raghavan said.

After the sovereign debt crisis hit island nation signed a $3 billion deal with the International Monetary Fund (IMF), President Ranil Wickremesinghe in his capacity as the Finance Minister has asked all above 18-year citizens to open tax files.

“If citizens at the age of 18 years can vote for the President, choose how a country is led, then they should pay tax,” Raghavan told a media briefing in Colombo on Friday.

From next year, all those who are over 18 years of age by January 01, 2024 will have to register for taxes, whether they pay or not.

“If earnings fit the tax bracket, then you should pay tax,” Raghavan said.

Sri Lanka is one of the countries that has lowest tax revenue after former president Gotabaya Rajapaksa abolished several taxes while reduced the income tax rates while raised the threshold level for taxes.

As a result, Sri Lanka lost both income and Value Added Tax in 2020 under this stimulus attempt.

Sri Lanka needs more revenues and restructuring debt by September was essential for debt to be made sustainable, an International Monetary Fund (IMF) mission has said.

The island nation has been looking into more taxes to boost revenue. It is also compelled to give up several subsidies due to lack of resources after the financial crisis hit the last year.

The macroeconomic situation in Sri Lanka has shown tentative signs of improvement, with inflation moderating, the exchange rate stabilizing, and the Central Bank rebuilding reserves, the IMF mission said last month. (Colombo/June17/2023)

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  1. Bandu Abey says:

    In Australia it is illegal to abstain from voting at any election. That is because the system appreciate the voice of the eligible citizens as to how the country should be run. There will be $20/ fine for not voting. System does not impose extra conditions other than the identification in registering for work. In this blessed place call Lanka the rulers not only avoid conducting elections in due time, but impose extra restrictions in voter registration. This backdoor president says he does not have money to conduct elections but he roams around the world, spending borrowed money (US$90 billions!!) while country being bankrupt.

  2. Chandana Ratnayaka says:

    You all know only to rip people off of their earnings. You cannot even provide a continuous supply of milk powder for our children and a continuous supply of eggs in the market. Unlike in the USA, your government does not provide any benefits to your citizens. How dare you come up with these kinds of ridiculous suggestions?

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Your email address will not be published. Required fields are marked *

  1. Bandu Abey says:

    In Australia it is illegal to abstain from voting at any election. That is because the system appreciate the voice of the eligible citizens as to how the country should be run. There will be $20/ fine for not voting. System does not impose extra conditions other than the identification in registering for work. In this blessed place call Lanka the rulers not only avoid conducting elections in due time, but impose extra restrictions in voter registration. This backdoor president says he does not have money to conduct elections but he roams around the world, spending borrowed money (US$90 billions!!) while country being bankrupt.

  2. Chandana Ratnayaka says:

    You all know only to rip people off of their earnings. You cannot even provide a continuous supply of milk powder for our children and a continuous supply of eggs in the market. Unlike in the USA, your government does not provide any benefits to your citizens. How dare you come up with these kinds of ridiculous suggestions?

IMF official: Sri Lanka’s road ahead is challenging, critical to keep up with reform momentum

ECONOMYNEXT –International Monetary Fund’s First Deputy Managing Director Gita Gopinath said Sri Lanka’s future with many reforms are challenging, but it is critical to keep up with the reform momentum.

Gopinath stated this after meeting the island nation’s State Finance Minister Shehan Semasinghe Central Bank Governor Nandalal Weerasinghe, and Treasury Secretary Mahinda Siriwardena on the sideline of the IMF/World Bank Spring Meetings in Washington.

“I commended them on hard-won economic gains in the past year. The road ahead is challenging and it’s critical to keep up with the reform momentum,” Gopinath wrote on her X platform.

Under IMF programme, President Ranil Wickremesinghe has implemented a raft of hard reforms including higher taxes.

Sri Lanka agreed to the IMF programme after it declared bankruptcy with sovereign debt default in April 2022.

Semasinghe after the meeting tanks Gopinath for acknowledging Sri Lanka’s economic progress.

“Our discussion was insightful and productive, and we appreciate the opportunity to delve into the challenges and opportunities ahead,” the State Finance minister said in his X platform.

“We remain steadfast in our commitment to our reform agenda and eagerly anticipate continued collaboration with the IMF to advance our shared goals.”

Sri Lanka was compelled to go for IMF after the unprecedented economic crisis which was followed by a political crisis that ousted former president Gotabaya Rajapaksa and his government who were legitimately elected.

The IMF programme has included reforms in state-owned enterprises, fiscal sector and financial sectors to ensure debt sustainability.

The global lender also has pledged its support to speed up the island nation’s lingering debt restructuring process with private creditors including sovereign bond holders. (Colombo/April 22/2021)

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Sri Lanka motor racing crash claims 7 lives, 4 critical

ECONOMYNEXT – A deadly accident at motor Race Sri Lanka’s hill country town of Diyathalawa has claimed at least 7 lives police said, after a racing vehicle, in the seasonal Fox Hill Super Cross ploughed in to spectators after running off the track.

Another 21 spectators were injured Sunday, and hospitalized and at least four were critical, police said.

Thousands of people come to watch the Fox Hill Super Cross race, which is usually held in April, as large numbers of people head to the cooler climes in the hills.

According to footage taken by spectators one car overturned on the side of the track.

Sri Lanka’s Newsfirst television said Marshalls were waving flags to caution other vehicles, when another car went off the track and crashed into spectators. (Colombo/April21/2024)

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Widespread support for Sri Lanka debt workout, reform progress at IMF/WB meet: Minister

ECONOMYNEXT – There was widespread support for Sri Lanka’s debt restructuring and acknowledgement of progress made under an International Monetary Fund program, at meeting of the fund and World Bank, State Minister for Finance Shehan Semasinghe said.

“The strides made in our economic recovery and financial stability have been acknowledged as significant advancements towards our country’s prosperity by our stakeholders and international partners,” Minister Semasinghe said in an x.com (twitter) post after attending the meetings.

“Further, it was heartening to note the widespread appreciation and support for Sri Lanka’s debt restructuring process.

“We remain steadfast in our commitment to reaching the restructuring targets and confident of smooth progress in the continued good-faith engagements for a speedy debt resolution that will ensure debt sustainability and comparability of debt treatment.”

Sri Lanka ended a first round of talks with sovereign bondholders in March without striking a deal but some agreement on the basis for a deal.

An initial deal with bilateral creditors have been reached, but they may be awaiting a deal with private creditors to sign formal agreements.

International partners have appreciated reforms made under President Ranil Wickremesinghe, Minister Semasinghe said.

“It was great to engage in productive bilateral discussions with all of whom appreciated the recent economic developments, progress in debt restructuring, strengthening of tax administration, and ongoing governance reforms,” he said.

Sri Lanka’s rupee has been allowed to re-appreciate by the central bank amid deflationary monetary policy, bringing tangible benefits to people in the form of lower energy and food prices, unlike in past IMF programs.

Electricity prices were cut as a strengthening currency helped reduce the cost of coal imports.

Related Sri Lanka central bank mainly responsible for electricity price cut

The currency appreciation has also allowed losses to the Employment Provident Fund imposed to be partially recouped, helping old workers near retirement, as well as raising disposable incomes of current wage earners on fixed salaries.

Related Sri Lanka EPF gets US$1.85bn in value back as central bank strengthens rupee

The IMF, which was set up after World War II to end devaluations seen in the 1930s after the Fed’s policy rate infected other key central banks, started to actively encourage depreciation after a change to its founding articles in 1978 (the Second Amendment).

The usefulness of money as a store of value, or a denominator of current and future values then decline, leading to loss of real savings, real wages and increases in social unrest.

Before that, members who devalued more than 10 percent after printing money for growth or any other reason, faced the threat of suspension from the organization as punishment.

Sri Lanka’s rupee has appreciated to around 300 to the US dollar now from 370 after a surrender rule was lifted in March 2023.

But there is no transparency on the basis that economic bureaucrats are allowing the currency to gain against the US dollar (the intervention currency of the central bank).

The rupee is currently under pressure, despite broadly prudent monetary policy, due to an ‘oversold position’ in the market after recent appreciation made importers and banks to run negative open positions as the usefulness of the currency as a denominator of future value declined with sudden strenghtening. (Colombo/Apr21/2024)

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