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Tuesday June 18th, 2024

Sri Lanka domestic power tariffs up 18-pct, hotels, industry 12-pct

ECONOMYNEXT – Sri Lanka power regulator has approved power tariff hikes by about 18 percent for domestic consumers taking the energy charge for users above 180 units to 89 rupees while hotels and industry rates have been hiked by around 11 to 12 percent.

Market pricing energy is required under an International Monetary Fund program to stop the Ceylon Electricity Board from borrowing from state banks.

Domestic borrowings require higher market interest rates and when money is printed to maintain the central bank’s fixed policy rate the rupee collapses.

The central bank however in the past had busted the rupee with its fixed policy rate and triggered currency crises in the past private credit picked up, even when taxes were hiked to reduce the budget deficit and fuel was market priced.

In June electricity tariffs were cut. Sri Lanka electricity tariffs cut selectively, windfall for hotels

Domestic users will pay energy charges ranging from 38 to 89 rupees and fixed charges from 480 rupees to 2,360 rupees.

Religious customers will pay energy charges between 12 to 59 rupees (above 181 units) and fixed charges of 180 to 1,360 rupees.

Industries will pay rates of 20 rupees below 300 units to 28 rupees a unit above and fixed charged of 340 to 1,120 rupees.

Hotels will pay the same rate as industry.

General purpose and government will pay between 43 rupees a unit (below 180 rupees) to 56 rupees (above 180) rupees a hike of about 23 percent and fixed charges of 750 rupees to 1,860 rupees.

Increases were also approved for time of day tariffs.

Download the 20 OCT 2023 CEB-EN

A summary of old and new tariffs are given below:

(Colombo/Oct20/2023 – updated with summary increases and industry and hotels rate of 11-12-pct)

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Sri Lanka’s Ceylon Chamber links up with Gujarat Chamber

ECONOMYNEXT – The Ceylon Chamber of Commerce has signed an agreement with the Southern Gujarat Chamber of Commerce and Industry (SGCCI) to increase trade cooperation between India and Sri Lanka.

The MOU was signed by CCC CEO Buwanekabahu Perera, SGCCI President Ramesh Vaghasia, in the presence of Dr Valsan Vethody, Consul General for Sri Lanka in Mumbai, India.

“With the signing of the MoU, … the Ceylon Chamber of Commerce and SGCCI aim to facilitate trade between the two countries via initiatives such as trade fairs and delegations, business networking events, training programmes,” the Ceylon Chamber said in a statement.

“This partnership will open doors for Sri Lankan businesses to explore opportunities in Surat’s dynamic market and enable the sharing of expertise and resources between the two regions.”

Established in 1940, SGCCI engages with over 12,000 members and indirect ties with more than 2,00,000 members via 150 associations. It promotes trade, commerce, and industry in South Gujarat.

The region’s commercial and economic centre Surat has risen to prominence as the global epicenter for diamond cutting and as India’s textile hub, and is ranked the world’s 4th fastest growing city with a GDP growth rate of 11.5%

Surat’s economic landscape is vibrant and diverse. As India’s 8th largest and Gujarat’s 2nd largest city, it boasts the highest average annual household income in the country.

The nearby Hazira Industrial Area hosts major corporations like Reliance, ESSAR, SHELL, and L&T. (Colombo/Jun18/2024)

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Sri Lanka telecommunications bill some clauses ruled unconstitutional by SC: Speaker

ECONOMYNEXT – Sri Lanka’s Supreme Court has found a number of clauses in a proposed amendment to the Telecom Telecommunications Amendment bill unconstitutional, speaker Mahinda Yapa Abeywardana said.

“Clause No 8, proposed section 9A 2 of the bill is inconsistent with Article 12 1 of the constitution, however this inconsistency shall cease if word ‘may’ will be replaced with word ‘shall’ as set out in the determination of the supreme court.”

“Clause No 9 is inconsistent with Article 12 1 of the constitution and only can be passed with special majority required under paragraph 2 of the Article 84. However, the inconsistency shall cease if clause is amended as set out in the determination of the supreme court.

Clause No 12, proposed section 17 10 of the bill is inconsistent with Article 12 1 of the constitution and can only be passed with special parliament majority required under Article 84 paragraph 2. However, the inconsistency shall cease if clause is amended as set out in the determination of the supreme court.”

Sections of clauses 13, 18, 20, 33 and 35 were also in violation of the constitution, and could only be passed by a special majority of parliament. (Colombo/Jun18/2024)

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Sri Lanka to exempt one house from imputed rent wealth tax: President

ECONOMYNEXT – Sri Lanka will exempt one house from a proposed wealth tax outlined in an International Monetary Fund program, President Ranil Wickremesinghe said.

About 90 percent of the people’s houses are likely to be exempt from the proposed tax, he said.

“[O]ne house will be exempt from this,” President Wickremesinghe told parliament Monday.

“It is going to have a very high threshold and I do not think the vast majority of the people in this country should even be worried about their house

“Don’t worry your house will be safe.”

The IMF program document however did not mention an exempt on one house, but did mention a threshold.

Taxing houses and thrift in general could have detrimental effects on people’s well-being housing stock and their willingness to remain in the country without migrating, critics say.

Related Sri Lanka to tax imaginary rents on houses under IMF deal

The mechanism of imputed rents was used because rates on houses was assigned to provincial councils and courts could strike it down.

Opposition legislator Harsha de Silva said the Samagi Jana Balwegaya welcomed President Wickremesinghe’s statement. (Colombo/June18/2024)

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