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Tuesday April 16th, 2024

Sri Lanka to halt midnight border tax amid corruption concerns

Import tax by Nick Youngson CC BY-SA 3.0 Pix4free

ECONOMYNEXT – Sri Lanka’s cabinet of ministers have given approval to draft a bill to suspend the Special Commodity Levy, amid corruption concerns, following a proposal submitted President Ranil Wickremesinghe, spokesman Bandula Gunawardana said.

The SCL is applied as a single tax, instead of the tax-on-tax effect seen when duty, CESS, PAL and VAT are applied on top of food imports in particular.

But SCL is imposed overnight as people are sleeping, without any discussion in parliament, raising serious concerns about its constitutionality as well as discretion and insider knowledge.

“There have been concerns about its mis-use,” Gunawardana said. “When taxes are suddenly changed there have been concerns.”

An International Monetary Find corruption diagnostic report has flagged the midnight tax as a discretionary door opened for corruption.

Similar sudden changes have also been made in an export CESS tax, unsing gazettes.

Sri Lanka’s IMF review will be passed after several ‘pior actions’.

But, it has the advantage of being a single tax operating exactly like a single import duty officials have said, in a country where there are multiple border taxes slapped on top of each other, drawing the ire of trade partners.

However, due to the sudden midnight nature, it also adds to policy uncertainty in the country’s overall policy unpredictability. (Colombo/Mar27/2024)

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IMF urged Sri Lanka to preserve “hard earned gains” after economic crisis: State FinMin

ECONOMYNEXT – The International Monetary Fund has urged Sri Lanka to preserve the hard earned gains after an unprecedented economic crisis under the global lender’s programme, State Finance Minister Shehan Semasinghe said.

The Sri Lankan delegation led by Shehan Semasinghe met Kenji Okamura, the Deputy Managjng Director of the IMF on the first day of the IMF and  World Bank Spring meeting.

“Mr. Okamura commended the Sri Lankan authorities on strong programme implementation and excellent reform progress. He emphasised the need to preserve the hard earned gains Sri Lanka has experienced since the beginning of the IMF programme and continue strong ownership,” the State Minister said in his X (Twitter) platform.

He said the Sri Lankan delegation including Central Bank Governor Nandalal Weerasinghe and Secretary to the Treasury Mahinda Siriwardana explained the recent socio-economic developments to Okamura.

He also affirmed the IMF top official on the authorities’ commitment to ensuring continuity and consistency of macroeconomic policies and reforms undertaken under the programme. (Colombo/April 16/2024)

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Sri Lanka State FinMin meets BCIU in US; discusses post-crisis investment prospects 

ECONOMYNEXT – Sri Lanka’s State Finance Minister Shehan Semasinghe met Business Council for International Understanding( BCIU) in Washington on the sideline of the IMF/World Bank Spring Meetings late on Monday and discussed investment prospects in the island nation which is gradually recovering from an unprecedented economic crisis.
“Our discussion centered on the potential that Sri Lanka offers for international investors. Explored various sectors, including education, tourism, renewable energy, agriculture and technology, where strategic investments can drive sustainable economic growth and development,” Semasinghe said in his X (Twitter) platform. 
“We reviewed the current macro-economic landscape of Sri Lanka, including recent reforms that have transformed to results. Glad to concluded the forum by marking constructive dialogue and a shared commitment to support the economic development of Sri Lanka.” 
“We thank participants, stakeholders holders and global partners for the significant interest shown in unlocking the full potential of the Sri Lankan economy and fostering greater international understanding and cooperation.” (Colombo/April 16/2024) 
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India allows Sri Lanka to import 10,000MT of onions

ECONOMYNEXT – India has relaxed an export ban allowing 10,000 metric tonnes of onions to be shipped to Sri Lanka, the Indian High Commission in Colombo said.

“The exemption for Sri Lanka reiterated India’s Neighbourhood First policy, adding to the Sinhala and Tamil New Year festivities here,” the statement said.

Onion prices went up in Sri Lanka after India and Pakistan banned exports.

The Directorate General of Foreign Trade has issued a notice allowing National Co-operative Exports Limited to ship 10,000 MT of onions.

The UAE has also been allowed to import 10,000MT of onions on top of 24,400MT already permitted.

A large Indian and South Asian expat community lives in the UAE. (Colombo/Apr15/2024)

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