An Echelon Media Company
Friday January 27th, 2023

Unhappy ending to Sri Lanka’s thriving spa industry averted

ECONOMYNEXT – Media reports that Sri Lanka planned to ban women massaging men and vice versa at ayurvedic spas has been denied by the Commissioner of Ayurveda, who said he had been misquoted and that there were no such plans.

Ayurveda Commissioner Dr M D J Abeygunawardena told EconomyNext on Tuesday January 17 that a newspaper report had misquoted a remark by him that a female nurse must be present when a male doctor examines a female patient.

He had made no comment on banning women massaging men or vice versa, he insisted.

Over the last 10 years, urban centres around the island have been littered with ayurvedic spas that some claim operate as fronts for brothels. A large number of these establishments operate around the clock and are said to employ young women from all over the country who offer “additional services” post-massage.

Abeywardena said in order to regulate the spa industry, it must first be identified whether spas and massaging come under traditional medicine or western medicine. Only then can proper regulation be imposed, he said, adding that introducing regulation will be a long process.

In September 2022, former President Maithripala Sirisena said Sri Lanka’s currency crisis, which is still ongoing, was driving young girls into the sex trade.

Sex-work is widespread in Sri Lanka with stigma around the profession equally widespread. There have been calls to regulate the industry, but at the legality of sex work remains vague at present.

Street sex workers are usually arrested by police under provisions in the Vagrants Ordinance of 1841. This archaic law allows police to arrest without warrant ‘every common prostitute wandering in the public street or highway, or in any place of public resort, and behaving in a riotous or indecent manner’ with a punishment of 14 days imprisonment and/or fine. Section 9 of the Vagrants Ordinance, meanwhile, has made it a crime to live off the earnings of prostitution.

Another law that’s frequently used against sex workers is Section 360A of the Penal Code as Amended by Act No 22 of 1995 which criminalises ‘procuring or attempting to procure a male or female, of any age, with or without their consent from Sri Lanka or outside for prostitution, or as an inmate of a brothel.’

Additionally, the Convention on Preventing and Combating Trafficking in Women and Children for Prostitution Act 2005 defines trafficking as ‘moving, selling or buying of women and children for prostitution within and outside the country for monetary or other considerations with or without the consent of the person being subjected to trafficking.’

In a historic court decision, a Colombo Fort magistrate in February acquitted a woman arrested in a brothel on charges of prostitution, declaring that it was not considered an offence in Sri Lanka for a woman to earn a living through prostitution although it is an offence to operate a brothel. Though the unprecedented ruling was celebrated by activists everywhere, in the eyes of many ordinary Sri Lankans – including some workers themselves – sex work remains a crime. (Colombo/Jan18/2023)

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Sri Lanka shares fall at market close on profit taking

ECONOMYNEXT – Sri Lanka shares fell on Thursday as profit taking entered the market mainly on financial and diversified sectors, brokers said.

The main All Share Price Index (ASPI) fell 0.13 percent or 11.50 points to close at 8,926.56.

“The market was trading on dull trade mainly due to profit taking,” an analyst said.

“Also we saw investors taking a sideline as quarterly reports started to come”.

The earnings in the first quarter of 2023 are expected to be negative with revised up taxes and an imminent electricity tariff hike.

Earnings in the second quarter are expected to be more positive with the anticipation of IMF loan and possible reduction in the market interest rates as the tax revenue has started to generate funds.

The central bank’s policy decision was expected and investors have been eying on IMF deal with hopes of rapid economic recovery from the current unprecedented economic crisis, however since the market gained in the last sessions profit taking has come about, analysts said.

The market has been on a rising trend on the hopes of a faster IMF deal. However, the central bank government said the IMF deal is likely in the quarter or in the first month of the second quarter.

The most liquid index S&P SL20 fell  0.33 percent or 9.21 points to 2,798.

LOLC had seen some attention by investors as the firm disposed 90,256,750 shares held with Agstar PLC at 15-17.50 rupees a share.

The market witnessed a turnover of 1.2 billion rupees, lower than the month’s daily average of 1.9 billion rupees.

Expolanka dragging the market down closed 2.36 percent down at 186.7 rupees a share. Sampath bank fell 1.41 percent to close at 42 rupees a share while Royal Ceramic Lanka closed 2.59 percent dwn at 30.1 rupees a share.

(Colombo/Jan26/2023)

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Sri Lanka bonds yields steady at close

ECONOMYNEXT – Sri Lanka bond yields were steady at close on Thursday, dealers said, while a guidance peg for interbank transactions by the Central Bank remained steady.

A bond maturing on 01.05.2024 closed at 31.00/20 percent unchanged from the last close.

A bond maturing on 15.05.2026 closed at 26.60/90 percent, up from 28.50/70 percent on Wednesday.

A bond maturing on 15.09.2027 closed at 28.60/85 percent, up from 28.50/60 percent at the last close.

The three months bill closed at 29.75/30.25 percent unchanged from the last close.

The Central Bank’s guidance peg for interbank US dollar transactions appreciated by another 2 cents to 362.14 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 360.49 rupees on Thursday, data showed.  (Colombo/Jan 26/2022)

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Sri Lanka central bank workers protest tax hike as governor defends painful measures

ECONOMYNEXT – Employees of Sri Lanka’s Central Bank have joined a week-long “black protest” campaign organised by state sector unions against a sharp hike in personal income tax, even as Central Bank Governor Nandalal Weerasinghe said painful measures were needed for the country to recover from its worst currency crisis in decades.

President of the Central Bank Executive Association Jayadu Perera told EconomyNext on Friday January 26 that while the protesting CBSL staff were not opposed to paying taxes, they take issue with the unprecedented increase which came into effect in the new year.

Perera claimed that the tax he paid in December had increased six-seven fold.

“This is true for most public servants, and we cannot bear this burden,” he said.

“This is a very unfair tax since it is the professionals of this country that make all the sacrifices,” he added.

Perera complained that Sri Lanka’s ruling class maintain high living standards and enjoy all the luxuries while subjecting workers like him to an “extremely unfair and unjust” tax.

Opposition to Sri Lanka’s newly increased direct taxes has been rising, with a number of unions and professional associations taking to the streets demanding that the decision is reversed.

The government, however, defends the tax hike arguing that it is strapped for cash as Sri Lanka, still far from a complete recovery, is struggling to make even the most basic payments, to say nothing of the billions needed for public sector salaries.

Economists say Sri Lanka’s bloated public service is a burden for taxpayers in the best of times, and under the present circumstances, it is getting harder and harder to pay salaries and benefits.

Defenders of the tax hike say that the road to recovery is a painful one, and Central Bank chief Weerasinghe, meanwhile, told reporters at the monthly monetary policy review on Wednesday January 25 that the country would have to take certain painful measures to come out of the crisis.

Asked about the trade union action organised by his staff – with most employees dressed in black – Weerasinghe joked that he too was in black but said in a more serious vein that at CBSL, anyone was free to exercise their democratic right to protest.

He also stressed that taxation is not under the purview of the Central Bank whose primary obligation is monetary policy.

The CBSL staff, however, continues to protest.

“This tax increase was implemented without any discussion with workers who are the victims of this policy,” claimed Perera.

Acknowledging the country’s dire financial straits, he said: “But why must only the professionals make sacrifices? Why not the politicians?”

Another worker who did not wish to be named claimed that he was left with just 10,000 rupees after tax.

“This an intolerable burden laid upon our heads. We will continue this protest until they give us relief. Today we did it during the lunch break. In the future we will do more,” he said.

Other workers who shared these sentiments told EconomyNext that most of them have debt obligations of their own and once they have settled loans, interest and other bills, a large income tax is the last straw.

“We have our own personal commitments. All we say is that taxation should be fair, transparent and equitable. Show us the rulers that are being taxed the same way,” said one CBSL worker.

Sri Lanka’s new tax regime has both its defenders and detractors. Critics who are opposed to progressive taxation said it serves as a disincentive to industry and capital which can be invested in business. They argue that a flat rate of taxation is implemented where everyone is taxed at the same rate.

Others, however, contend that the new taxes only affect some 10-12 percent of the population and, given the country’s economic situation, is necessary, if not vital.

Critics of the protesting workers argue that most of the workers earn high salaries that most ordinary people can only dream of, and though there may be some cases where breadwinners could be taxed more equitably, overall, Sri Lanka’s tax rates remain low and are not unfair. (Colombo/Jan26/2023)

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