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Tuesday February 27th, 2024

Sri Lanka minister hopes for higher tax collection after RAMIS upgrading

ECONOMYNEXT – Sri Lanka’s Acting Finance Minister Shehan Semasinghe hopes for higher tax revenue when the Revenue Administration Management Information System (RAMIS) is upgraded to eliminate the contacts between the tax payers and administrators.

RAMIS was introduced when the island nation signed for the 16th IMF loan in 2016. However, trade unions in the Inland Revenue Department (IRD) had warned the system was malfunctioning despite billions being spent for it.

Finance Ministry officials say IRD employees had been resisting the RAMIS because it prevents direct interactions with taxpayers and possible bribes for defaulting or under paying taxes.

The island nation is struggling to boost its revenue in line with the target it has committed to the IMF in return of a $3 billion loan programme to come out of an unprecedented economic crisis.

The IMF has estimated a revenue fall of 15 percent this year from the ambitious target of 3.1 trillion rupees. The government is on the process to somehow achieve the target with the IMF has yet to finalize the second tranche of the $3 billion loan.

“The RAMIS system will be upgraded within the next few weeks. So, I don’t think there will be a physical interaction between the taxpayers and tax administrators,” Semasinghe told reporters at a media briefing on Thursday (28).

“This has to be an independent system. When there is room for physical discussion between the taxpayers and tax administrators, there could be room for errors. So now we are eliminating all room for errors.”

The island nation’s revenue fell to as low as below 8.5 percent of the GDP in 2021 after former president Gotabaya Rajapaksa slashed the taxes soon after he won the presidency in November 2019. Many economists saw the move as a politically motivated strategy to win the 2020 general election.

Rajapaksa secured a near-two third majority in the 2020 general election but was forced to flee the country amid massive protest by the public after the economic crisis hit the ground with lower revenue and higher government expenditure.

President Ranil Wickremesinghe government since July last year has implemented some tough reforms amid strong protests by opposition and public.

Wickremesinghe, also the finance minister has targeted to increase this year’s government revenue to 10.3 percent of the GDP. (Colombo/September 28/2023)

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Top US official calls for inclusive reforms, deeper defence ties with Sri Lanka

ECONOMYNEXT — United States Deputy Secretary of State for Management and Resources Richard Verma in discussions with Sri Lanka officials had called for inclusive reforms and stronger human rights and also discussed deeper defence and maritime cooperation.

The United States remains committed to the economic growth and prosperity of Sri Lanka, statement from the US Embassy in Colombo quoted the official as telling government, civil society and economic leaders during his February 23-24 visit to Sri Lanka.

“Verma met with President Ranil Wickremesinghe and Foreign Minister Ali Sabry to discuss progress on Sri Lanka’s IMF program, including inclusive economic and governance reforms aimed at keeping Sri Lanka on the path to sustainable economic growth.  Deputy Secretary Verma stressed the vital need to protect human rights and fundamental freedoms, including freedom of expression. They also explored opportunities to deepen defence and maritime cooperation between the United States and Sri Lanka, including strengthening the Sri Lanka Navy’s capabilities to safeguard national security and promote a more stable Indo-Pacific region,” the statement said.

 On February 23, aboard the SLNS Vijayabahu, one of three former U.S. Coast Guard cutters transferred by the United States to Sri Lanka, Deputy Secretary Verma said: “I am pleased to announce that the Department of State has notified Congress of our intent to transfer a fourth medium endurance cutter to Sri Lanka.  The Department obligated $9 million in Foreign Military Financing to support this effort.  We look forward to offering the cutter, pending the completion of Congress’ notification period.  If completed, this transfer would further strengthen defense cooperation between the United States and Sri Lanka.  The ship would increase Sri Lanka’s ability to patrol its Exclusive Economic Zone, monitor its search and rescue area, and provide additional security for ships from all nations that transit the busy sea lanes of the Indian Ocean.” 

 Participating in the announcement at Colombo Port were Sri Lanka State Minister of Defense Premitha Bandara Tennakoon, Commander of the Sri Lanka Navy Vice Admiral Priyantha Perera, and U.S. Ambassador to Sri Lanka Julie Chung, who remarked, according to the statement: “The United States has previously transferred three cutters to the Sri Lankan Navy, which deploys these ships for maritime operations and law enforcement missions, countering human trafficking and drug trafficking, while supporting humanitarian assistance and disaster response efforts. The eventual transfer of a fourth vessel would be just one more point in a long history of cooperation between Sri Lanka and the United States in preserving a free and open Indo-Pacific region.” 

Verma also visited the site of the West Container Terminal (WCT), a deepwater shipping container terminal in the Port of Colombo. The WCT, currently being constructed by Colombo West International Terminal (CWIT) Private Limited with 553 million US dollars in financing from the U.S. International Development Finance Corporation, will provide critical infrastructure for the South Asian region, the embassy said.

“Operating near capacity since 2021, the Port of Colombo’s new addition will be the port’s deepest terminal and aims to boost Colombo’s shipping capacity, expanding its role as a premiere logistics hub connecting major routes and markets, boosting prosperity for Sri Lanka without adding to its sovereign debt,” it said. (Colombo/Feb27/2024)

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Sri Lanka police chief appointment against constitution: Opposition Leader

Samagi Jana Balavegaya leader Sajith Premadasa addresses the rally

ECONOMYNEXT – The appointment of Sri Lanka’s new police chief Deshbandu Tennakoon is against the constitution as the decision lacked required votes at the Constitutional Council, Opposition Leader Sajith Premadasa said.

President Ranil Wickremesinghe on Monday (26) appointed Deshbandu Tennakoon as the 36th Inspector General of Police (IGP) of the country after the Constitutional Council (CC) cleared the official who along with three other police officers were asked by the Supreme Court to compensate 2 million rupees in a fundamental rights case last year.

“CC didn’t approve IGP’s appointment. Votes: 4 for; 2 against; 2 abstentions. At least 5 votes are required for a decision,” Premadasa said in his X (Twitter) platform.

“Speaker has a casting vote only in case of a tie. 4/2 is not a tie! Constitution is being blatantly violated for the second time. Shame on you speaker!”

Speaker Mahinda Yapa Abeywardena was not reachable for a comment on the Opposition Leader’s claim.

The President Media Division (PMD) said the President appointed Tennakoon “as the IGP in accordance with the provisions of the Constitution”.

The island nation’s Supreme Court on December 14 ordered Tennakoon when he was the Acting IGP and three other officials to pay a compensation of 500,000 rupees each for the violation of the fundamental rights of an individual.

The Supreme Court also instructed the Police Commission to take disciplinary action against the said Police officers including Tennakoon after it considered the petition filed by W. Ranjith Sumangala who had accused the Police officers of violating his fundamental rights during his detention at Mirihana Police Station in 2011.

The Supreme Court held that the four police officers violated the fundamental rights of the petitioner by his illegal arrest, detention and subjection to torture at the Mirihana Police Station, which was under the supervision of Tennakoon at the time of the arrest. (Colombo/Feb 27/2024)

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All major party leaders Sri Lanka remained unpopular in January: poll

ECONOMYNEXT — All major party leaders in Sri Lanka continued to show negative favourability ratings in a January 2024 poll indicating continued unpopularity, with leftist leader Anura Kumara Dissanayake increasing his favourability by 12 points to -10.

The poll, run by the Institute for Health Policy (IHP), showed that favourability of opposition leader Sajith Premadasa declined by 9 points to -53 in January, while President Wickremesinghe’s also dropped by 9 points to -77.

The IHP said in a statement on February 22 that favourability estimates for each month are based on 100–500 interviews conducted during that month and during a few weeks before and afterward to ensure a minimum set of responses. The January 2024 estimates are based on 376 (Premadasa), 346 (Dissanayake), 361 (Wickremasinghe), and 121 (former president Gotabaya Rajapaksa) interviews.

According to the IHP, its Sri Lanka Opinion Tracker Survey (SLOTS) surveys a national sample of adults (ages 18 and over) reached by random digit dialling of mobile numbers, and others coming from a national panel of respondents who were previously recruited through random selection.

SLOTS tracks favourability by asking respondents if they have a favourable or unfavourable opinion of a public figure or institution: net favourability being the average of the positive (+100) and negative (-100) responses. All
estimates are weighted to match the national population with respect to age, sex, ethnicity, socioeconomic status, sector, province and past voting preference. Monthly estimates are based on samples of 100+ interviews pooled from interviews in each month and from weeks before and afterwards. As the January update uses a more recent data set than the previous update, there are small changes in estimates of favourability ratings for previous months.

According to the institute, the SLOTS survey has previously been funded by the Neelan Tiruchelvam Trust, the UK National Institute for Health and Care Research (NIHR), The Asia Foundation in Sri Lanka, and others.

“Current field work is financed by the IHP Public Interest Research Fund and others. The sponsors play no role in the study design, analysis, or interpretation of findings. Furthermore, the survey findings do not necessarily reflect the views or positions of past and present funders. Interested parties can contact IHP for more detailed data and results,” it said in the statement. (Colombo/Feb27/2024)

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