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Friday July 12th, 2024

Sri Lanka people cannot bear another VAT hike to increase state salaries twice: President

ECONOMYENEXT – Sri Lanka hiked value added tax to 18 percent to help pay state worker salaries and give the first increment this year, President Ranil Wickremesinghe said, as sections of state workers started strikes ahead of elections.

During the last economic crisis, some suggested sending 500,000 state workers home on no pay leave until money could be found to pay their salaries.

“I said at the time I cannot send anyone on leave,” President Wickremesinghe was quoted as saying at a ceremony in the Uva region.

“I raised VAT to 18 percent and faced the criticism of the public to pay the salaries.”

The first increment had already been granted in 2024.

“Development officers, clerks are saying to raise the salaries. We cannot do that. To do that we will have to raise VAT again. The people cannot bear it.”

Another salary increment will be announced in the budget for 2025, and a committee is looking into the matter, President said.

Without cutting public service salaries, the current administration has frozen new hires.

A 10,000 rupee salary hike had been given.

Sri Lanka’s economy has started to recover and tax revenues are starting to increase.

In 2021, 85 percent of the tax revenues went to pay state salaries and pensions and other current expenses were met with borrowings.

Salaries and pensions were reduced to 48 percent of taxes last year, but the current account of the budget is still in deficit. (Colombo/July07/2024)

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Sri Lanka appoints new Attorney General

ECONOMYNEXT – Sri Lanka’s President Ranil Wickremesinghe has appointed K A Parinda Ranasinghe PC as Attorney General.

He was appointed in terms of Article 61E (b) of the Constitution of Sri Lanka, the president’s media division said.

The new AG received the appointment from President Wickremesinghe at the Presidential Secretariat on Friday.

He fills the post after the retirement of former Attorney General Sanjay Rajaratnam. (Colombo/Jul12/2024)

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Sri Lanka rupee closes stronger at 301.70/302.00 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed stronger at 301.70/302.00 to the US dollar on Friday, from 302.80/303.00 to the US dollar on Thursday, dealers said, while bond yields were up.

A bond maturing on 15.12.2026 closed at 10.90/11.00 percent, up from 10.85/95 percent.

A bond maturing on 15.12.2027 closed at 11.75/80 percent, up from 11.80/88 percent.

A bond maturing on 01.05.2028 closed at 11.90/12.00 percent.

A bond maturing on 15.09.2029 closed at 12.10/30 percent, up from 12.15/25 percent. (Colombo/Jul12/2024)

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Sri Lanka stocks close up, muted activity

ECONOMYNEXT – The Colombo Stock Exchange closed up on Friday, data on its site showed.

The broader All Share Index closed up 0.35 percent, or 41.71 points, at 11,843; while the more liquid S&P SL20 Index closed up 0.56 percent, or 19.20 points, at 3,454.

Turnover was low at 653 million.

“The market picked up a bit from yesterday but it’s still below the psychological 12,000 mark,” Softlogic Stockbrokers said.

“Local retail participation drove the market predominantly.”

John Keells Holdings Plc brought in Rs109mn to the turnover, and the share closed flat at 194.50.

Melstacorp Plc contributed in Rs104mn to the turnover, and the share closed flat at 85.00.

Sentiment around the banking counters was mostly negative. Sampath Bank Plc closed down at 77.00, closed flat at 101.25, and Hatton National Bank Plc closed flat at 195.25.

The top contributors to the ASPI were Commercial Bank of Ceylon Plc (up at 103.50), Bukit Darah Plc (up at 397.00), and Hayleys Plc (up at 101.00).

Foreign participation remained low as well. There was a higher net foreign outflow of 101 million.

“Foreign selling was seen on John Keells Holdings, and banking counters; Hatton National Bank Plc (down at 195.00), Pan Asia Banking Corporation Plc (down at 20.70), and Commercial Bank of Ceylon Plc.

There was selective foreing interest on the diversified financials sector, particularly in companies that had vehicle leasing portfolios. “We think this might be due to the news of the vehicle import ban possibly ending.”

LOLC Holdings Plc closed up at 440.50, People’s Leasing and Finance Plc closed up at 12.20.

Softlogic Holdings Plc which announced the date of its rights issue, closed up at 8.50. (Colombo/Jul12/2024)

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