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Friday March 1st, 2024

Sri Lanka VAT on books makes knowledge unaffordable, violates UNESCO convention: industry

ECONOMYNEXT – Sri Lanka’s book industry has called for a reversal of the value added tax on books, which they warned will make knowledge unaffordable to many and the island may also be in violation of a UNESCO convention on educational materials and books.

Under an International Monetary Fund program to boost revenues rather than cutting spending, called ‘revenue based fiscal consolidation’ Sri Lanka has to raise taxes and reduce exemptions.

The country ran into external default after macro-economist engaged in extreme policy involving and tax rate cuts, after two currency crises from previous money printing to target ‘potential output’, ended up reducing growth.

Associations representing local publishers, printers, booksellers and importers and writers and academics are protesting the tax on books.

“We acknowledge that economic challenges spanning multiple government terms have led to a situation where the broader population has been required to shoulder the financial implications…,” the General Secretary of the Sri Lanka Book Publishers Association (SLBPA) Dinesh Kulatunga told reporters.

“But is it fair that this short-term requirement to boost government revenue should have the longer-term destructive consequence of retarding the education, culture, intellectual progress and personal development of generations of Sri Lankans, and negatively impact the development of the knowledge economy?” he asked.

He was speaking at a news conference where Sri Lanka Book Importers and Exporters Association, the Sri Lanka Writers Association and academics participated.

They charged that Sri Lanka was in violation of the UNESCO Florence Agreement of 1950, to which the country was a signatory.

The Florence Agreement is a treaty that binds Contracting States to not impose customs duties and taxes on certain educational, scientific, and cultural materials that are imported.

“With the imposition of VAT on books, Sri Lanka attains the dubious distinction of becoming one of a very few countries that impose a tax on a vital source of knowledge and information,” the President of Sri Lanka Book Publishers Association Samantha Indeewara said.

Industry officials say the industry already pays around a billion rupees or more in taxes on imported raw materials.

The International Publishers Association (IPA) and the European and International Booksellers Federation (EIBF) has written President Ranil Wickremesinghe to voice their objections, they said.

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Extracts from UNESCO Florence Agreement

PREAMBLE

The Contracting States,

Considering that the free exchange of ideas and knowledge and, in general, the widest possible dissemination of the diverse forms of self-expression used by civilizations are vitally important both for intellectual progress and international understanding, and consequently for the maintenance of world peace;

Considering that this interchange is accomplished primarily by means of books, publications and educational, scientific and cultural materials;

Considering that the Constitution of the United Nations Educational, Scientific and Cultural Organization urges co-operation between nations in all branches of intellectual activity, including “the exchange of publications, objects of artistic and scientific interest and other materials of information” and provides further that the Organization shall “collaborate in the work of advancing the mutual knowledge and understanding of peoples, through all means of mass communication and to that end recommend such international agreements as may be necessary to promote the free flow of ideas by word and image” ;

Recognize that these aims will be effectively furthered by an international agreement facilitating the free flow of books, publications and educational, scientific and cultural materials; and

(Colombo/Feb06/2024)

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Sri Lanka’s RAMIS online tax collection system “not operatable”: IT Minister

ECONOMYNEXT – Sri Lanka’s online tax collection system RAMIS is “not operatable”, and the Ministry of Information Technology is ready to do for an independent audit to find the shortcomings, State IT Minister Kanaka Herath said.

The Revenue Administration Management Information System (RAMIS) was introduced to the Inland Revenue Department (IRD) when the island nation signed for its 16th International Monetary Fund (IMF) programme in 2016.

However, trade unions at the IRD protested the move, claiming that the system was malfunctioning despite billions being spent for it amid allegations that the new system was reducing the direct contacts between taxpayers and the IRD to reduce corruption.

The RAMIS had to be stopped after taxpayers faced massive penalties because of blunders made by heads of the IT division, computer operators and system errors at the IRD, government officials have said.

“The whole of Sri Lanka admits RAMIS is a failure. The annual fee is very high for that. This should be told in public,” Herath told reporters at a media briefing in Colombo on Thursday (29)

“In future, we want all the ministries to get the guidelines from our ministry when they go for ERP (Enterprise resource planning).”

President Ranil Wickremesinghe’s government said the RAMIS system will be operational from December last year.

However, the failure has delayed some tax collection which could have been paid via online.

“It is not under our ministry. It is under the finance ministry. We have no involvement with it, but still, it is not operatable,” Herath said.

“So, there are so many issues going on and I have no idea what the technical part of it. We can carry out an independent audit to find out the shortcomings of the software.”

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

The crisis-hit island nation is struggling to boost its revenue in line with the target it has committed to the IMF in return for a 3 billion-dollar extended fund facility. (Colombo/Feb 29/2024) 

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Sri Lanka aims to boost SME with Sancharaka Udawa tourism expo

ECONOMYNEXT – Sri Lanka is hosting Sancharaka Udawa, a tourism industry exhibition which will bring together businesses ranging from hotels to travel agents and airlines, and will allow the small and medium sector build links with the rest of the industry, officials said.

There will be over 250 exhibitors, with the annual event held for the 11th time expected to draw around 10,000 visitors, the organizers said.

“SMEs play a big role, from homestays to under three-star categories,” Sri Lanka Tourism Promotion Bureau Chairman, Chalaka Gajabahu told reporters.

“It is very important that we develop those markets as well.”

The Sancharaka Udawa fair comes as the Indian Ocean island is experiencing a tourism revival.

Sri Lanka had welcomed 191,000 tourists up to February 25, compared to 107,639 in February 2023.

“We have been hitting back-to-back double centuries,” Gajabahu said. “January was over 200,000.”

The exhibition to be held on May 17-18, is organized by the Sri Lanka Association of Inbound Tour Operators.

It aims to establish a networking platform for small and medium sized service providers within the industry including the smallest sector.

“Homestays have been increasingly popular in areas such as Ella, Down South, Knuckles and Kandy,” SLAITO President, Nishad Wijethunga, said.

In the northern Jaffna peninsula, both domestic and international tourism was helping hotels.

A representative of the Northern Province Tourism Sector said that the Northern Province has 170 hotels, all of which have 60-70 percent occupancy.

Further, domestic airlines from Colombo to Palali and the inter-city train have been popular with local and international visitors, especially Indian tourists. (Colombo/Feb29/2024)

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Sri Lanka rupee closes at 309.50/70 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 309.50/70 to the US dollar Thursday, from 310.00/15 on Wednesday, dealers said.

Bond yields were slightly higher.

A bond maturing on 01.02.2026 closed at 10.50/70 percent down from 10.60/80 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.10 percent from 11.90/12.00 percent.

A bond maturing on 01.07.2028 closed at 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.30/45 percent up from 12.20/50 percent.

A bond maturing on 15.05.2030 closed at 12.35/50 percent up from 12.25/40 percent.

A bond maturing on 01.07.2032 closed at 12.55/13.00 percent up from 12.50/90 percent. (Colombo/Feb29/2024)

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