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Tuesday February 7th, 2023

Sri Lanka eyes Saudi investments for energy, real estate, Port City – Foreign Minister 

 ECONOMYNEXT – Sri Lanka is eying for Saudi Arabian investments into the island nation’s renewable energy, petroleum, real estates, hospitality, and Port City, Foreign Minister Ali Sabry said after key Kingdom officials in Madinah city.

Sabry is on a five-day official visit to the Kingdom of Saudi Arabia from January 23-27 on an invitation of the Minister of Foreign Affairs of the Kingdom Prince Faisal bin Farhan Al Saud.

He met officials of the Organization of Islamic Cooperation (OIC) and Faisal bin Salman bin AbdulAziz Al-Saud, Governor of Madinah

“The OIC meeting was very important for us because there was a deterioration of our relationship,” Sabry told EconomyNext via telephone from Saudi Arabia.

“We also discussed with the Medina governor and other officials on investments into petroleum, hospitality, employment,  energy, real estate and the Port City. We also hope to avoid double taxation.”

“There could be a lot of opportunities for Sri Lanka from Saudi Vision 2030 where a lot of development is taking place. This is a good opportunity for Sri Lanka’s builders, engineers, quantity surveyors, and the IT sector.”

Saudi Arabia is one of Sri Lanka’s top markets for expatriate workers and remittances is the island nation’s top foreign exchange source.

Saudi Arabia had not expressed any interest in helping with a fuel credit line when former president Gotabaya Rajapaksa’s government approached the Kingdom officially amid a deteriorated relation after Rajapaksa’s government stubbornly refused an OIC request to stop forced cremation of COVID-19 Muslim dead bodies.

Sri Lanka has been looking for large investments into the country to move away from the ongoing unprecedented economic crisis.

Sabry said there was no plan to request an oil credit this time.

“Credit means we have to repay it in future. So we are focusing more on investments.”

Minister Sabry is scheduled to meet with Foreign Minister Farhan Al Saud and discuss further enhancement of the cordial bilateral relations. He will also meet with the senior officials of the Islamic Development Bank and other top officials in the next two days.(Colombo/Jan24/2023)

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  1. sacre blieu says:

    And so the stripping of assets goes on with no sign of any abatement. Every day sees a discovery or revelation of the great amount of looting, as a result of fraud, bribery, and corruption. It appears that the continuous printing and pumping of money into the economy has been mainly to fund the looting of every such government entity and department, as is also evident by the comment of the Gov., of the CB that even the private sector is guilty. not surprised if even the devil has been robbed, going by this epidemic of the greatest proportions. Never has been our atmosphere acrider.

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  1. sacre blieu says:

    And so the stripping of assets goes on with no sign of any abatement. Every day sees a discovery or revelation of the great amount of looting, as a result of fraud, bribery, and corruption. It appears that the continuous printing and pumping of money into the economy has been mainly to fund the looting of every such government entity and department, as is also evident by the comment of the Gov., of the CB that even the private sector is guilty. not surprised if even the devil has been robbed, going by this epidemic of the greatest proportions. Never has been our atmosphere acrider.

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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