Economy

Sri Lanka income taxes up 291-pct to Sept 2023, PAYE up 497-pct

Tuesday November 14, 2023 2:38 pm

ECONOMYNEXT – Sri Lanka has collected 134.4 billion rupees in personal income tax with the major portion coming from advance taxes on wage earners, data from the Finance Ministry showed.

Pay-As-You-Earn/Advanced Personal Income Tax was up 497.8 percent to 107 billion rupees, higher than the full year target of 100 billion rupees.

Sri Lanka reduced the tax-free allowance to only 100,000 rupees (about 300 US dollars) and started to tax everyone earning above 10 US dollars a day after the country defaulted on its foreign debt after the most aggressive deployment of ‘macro-economic policy’ in the history of the island’s central bank.

The rate cuts which were backed up by tax cuts to close what state economic bureaucrats said was to close a ‘persistent output gap’ after the International Monetary Fund gave technical advice to calculate ‘potential output’.

The severe employment of Cambridge/Saltwater economics was employed by an administration said to have been run by ‘professionals’ somewhat similar to an ideology generally known as technocracy that developed in the West, students of history say.

PAYE thresholds were raised amid protests from some wage earners who wanted to pay tax through wages which was hassle free. After the default thresholds were brought down steeply.

There have been suggestions to give dependent allowances and widen the slab to reduce brain drain, however relief is not possible this year, as the country tries to re-structure debt, according to the budget.

Revenues from withholding tax (including on interest) went up 672.7 percent to 110.4 billion rupees.

Taxes from non PAYE income tax was only 30 billion rupees.

The Inland Revenue Department is now operating a policy of opening tax file for all individuals above 18 years, focusing initially on professionals, the report said.

“Enforcement will be further enhanced through the strengthening of the Large Taxpayers’ Unit (LTU) and the newly established High Net Worth Individuals’ (HNWI) Unit,” the Finance Ministry said.

“Going forward, all tax collections will be processed only through RAMIS (an electronic tax filing system).

“Further, the online portal for Individual Tax Identification Number (TIN) registration and Personal Income Tax (PIT) filing will be simplified.

“Moreover, Key Performance Indicators (KPIs) will be introduced to IRD on enhancing audit-effectiveness, improving tax return filing, recovering collectible revenue and increasing registration.”

Corporate income tax 8.7 percent to Rs. 415.6 billion in the first nine months of 2023 from 382.2 billion rupees last year. In an economic downturn corporate profits fall.

Unlike VAT both corporate income taxes and personal income taxes come at the cost of growth generating economic activities.

VAT is collected after a gainful economic decision is made by ordinary citizens contributing to an economic recovery as well as taxes, while income tax halts activity and transfers money to the state to be spent by planners and rulers. (Colombo/Nov14/2023)

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Markets

Sri Lanka stocks close up as some investor interest returns

Monday December 4, 2023 6:12 pm

ECONOMYNEXT – The Colombo Stock Exchange closed up on Monday, CSE data showed.

The All Share Price Index was up 0.22 percent, or 23.33 points, at 10,743.59.

The S&P SL20 index was up 0.68 percent, or 20.60 points, at 3,067.73.

Turnover was at 708 million. The banks sector contributed 189 million, while the food, beverage and tobacco sector contributed 176 million of this.

Sri Lanka’s stock market has seen some investor interest return after last week’s news that the country had managed an agreement on a debt restructuring deal with an official creditor committee, and foreign funds for some development projects resumed.

Top positive contributors to the ASPI in the day were Sampath Bank Plc (up at 71.50), LOLC Holdings Plc (up at 379.00), and Commercial Bank of Ceylon Plc, (up at 90.90).

There was a net foreign outflow of 52 million.

Citrus Leisure Plc, which announced that its banquet hall and revolving restaurant at the Lotus Tower would launch on or around Dec 9, saw its share price rise to 6.20 rupees. (Colombo/Dec4/2023).

Bonds & Forex

Sri Lanka rupee closes broadly steady at 328.10/30 to the US dollar

Monday December 4, 2023 5:24 pm

ECONOMYNEXT – Sri Lanka’s rupee closed at 328.10/30 to the US dollar on Monday, from 328.00/10 on Friday, dealers said.

Bond yields were stable.

A bond maturing on 01.06.2025 closed at 13.70/14.00 percent from 13.70/95 percent.

A bond maturing on 01.08.2026 closed at 13.90/14.10 percent from 13.90/14.05 percent.

A bond maturing on 15.01.2027 closed at 14.00/14.10 percent from 14.05/10 percent.

A bond maturing on 01.07.2028 closed at 14.20/35 percent from 14.15/25 percent.

A bond maturing on 15.05.2030 closed at 14.25/45 percent, from 14.20/45 percent.

A bond maturing on 01.07.2032 closed at 14.05/40 percent, from 14.00/45 percent. (Colombo/Dec4/2023)

Crime

Gov minister highlights abortion rights, sex-ed for children, and Sri Lanka men killing their women

Monday December 4, 2023 4:21 pm

ECONOMYNEXT – Sri Lanka’s legislators have politicized the topics of rape and violence without addressing the elephant in the room, Jeevan Thondaman, Minister of Water Supply and Estate Infrastructure Development said in parliament on Monday (4).

“All the members here are talking about rape. What happens after that? We must talk about abortion rights. That is not something anyone wants to touch on, and that is why we are in this place right now,” Thondaman said.

“Despite alarming statistics on rape and violence, women are often blamed and punished for it. The criminalisation of abortion is a major example of this.”

Sri Lanka has some of the most restrictive abortion laws in the world. According to a 2016 estimate by the Health Ministry, he said, approximately 658 abortions take place a day, and close to 250,000 a year.

“That’s 250,000 women whose lives you are endangering.”

He added that what was needed at this point in time was comprehensive sexual education (CSE) for children and young people.

“Only through CSE in schools will children and young people develop, accurate, age appropriate knowledge attitude and skills; positive values such as respect for human rights, gender equality, diversity and attitude and skills that contribute to a safe, healthy and positive relationship.”

Thondaman pointed out that CSE plays a pivotal role in preparing young people for a world where HIV, AIDS, sexually transmitted infections, unintended pregnancies, and sexual and gender based violence still pose a risk to their well-being.

“CSE basically empowers children take control and make informed decisions freely and responsibly.”

Thondaman also highlighted the findings of a 2021 study (Fatalities_20211109_UNFPA) by the UNFPA and the University of Kelaniya that showed that a majority of women killed in Sri Lanka were murdered by those close to them.

“62 percent of homicides of Sri Lankan women are committed by either an intimate partner, ex-partner or family member. 84 percent are killed in their own homes by someone they know.”

Police and the judiciary have failed Sri Lanka’s women, the minister pointed out.

“Only 5 percent of these cases, between 2013-2017, were ever concluded. Men claim they were provoked, or are of unsound mind or have mental illness: These have been successful defenses. And the Police often express sympathy to this narrative as opposed to the victim’s.”

“We have a history of protecting oppressors.”

It takes 7-10 years for a child rape case to conclude, he pointed out.

Establishment of child courts are needed, he said, as well as several legislative amendments. “The government is working on a new law to reform the domestic violence act, reform of marriage and divorce laws to ensure there is an easier path to divorce: no one should be forced to remain in a marriage that is either abusive or not healthy.” (Colombo/Dec4/2023)