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Friday March 1st, 2024

Sri Lankans deserve transparency, accountability during hard reforms: US envoy

Julie Chung – Image credit: Un Yarat]/Flickr

ECONOMYNEXT — While commitments agreed to under an ongoing International Monetary Fund (IMF) programme require Sri Lanka to carry out hard and unpopular reforms, the public deserve transparency and accountability from leaders, US ambassador Julie Chung said.

Speaking at a American Chamber of Commerce CXO Forum in Colombo on Wednesday January 31, the ambassador said the commitments required by the IMF as part of its Extended Fund Facility programme call for government reform measures in both tax compliance and combatting corruption.

“These are hard steps, and not always popular. Sri Lanka has taken difficult measures to put the country on a long-term sustainable footing and comply with the IMF commitments. But the people of Sri Lanka deserve and continue to demand openness, transparency, and accountability from their leaders as the process of reforms moves forward,” she said.

The new higher value added tax (VAT) rates have been a hit on the average Sri Lankan and the country’s businesses, she told the business leaders in attendance at the event

“We understand that while there may be short term necessary pains, the public deserves to know that such measures are being taken looking at the wholeness of the problem and endemic issues that must be addressed in a structural, sustainable way, fair and transparent to all.  That includes not just raising taxes but eliminating tax loopholes, addressing government inefficiencies, particularly in state owned enterprises,” the diplomat said.

“It means digitalising customs to raise revenue and reduce corruption.  Creating predictable customs duties and streamlined processes would encourage importers, who want to import more to Sri Lanka but are worried about the uncertainty in the import process.  Unpredictable customs fees discourage importers and limit the amount of customs revenue the Sri Lankan government can collect.  This shifts the burden of tax revenue further onto the shoulders of the people, who can’t bear much more,” she said.

Chung said that in a recent meeting National Chamber of Exporters, business owners had relayed some of the obstacles they face, including red tape, regulatory challenges, and unpredictability.

“Exports and private sector growth will be the engine of recovery, but they need the space and support to thrive.  As the largest export market for Sri Lanka, the United States can help be part of the solution,” she said. (Colombo/Feb01/2024)

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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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