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FTZ Union requests Govt. to collar bigtime tax evaders

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The Free Trade Zones and General Services Employees’ Union (FTZ&GSEU) has made a call to take immediate action on companies that have become VAT and income tax defaulters, rather than increasing the indirect tax burden on the public.

In a letter to all MPs, the FTZ&GSEU says the following factors were revealed in a Parliament speech by MP Mahindananda Aluthgamage on Sep. 20.

  • Only 25,692 companies have paid taxes out of 100,005 business companies that have income tax files opened. Accordingly, 74,313 companies have defrauded in paying due taxes.
  • Out of the 60,721 enterprises registered for VAT only 185 have paid VAT charged from customers by September to the government. This means the remaining 60,536 enterprises have kept for themselves the VAT charged from customers.
  • Income tax has not been paid by a leading businessman who owns a popular chain of garment outlets and also by a businessman owning a popular supermarket chain.
  • Income tax is not paid by 75 MPs.

“Whatever the motive was for MP Aluthgamage to expose these defrauds, in a country where indirect tax total 83 percent, it is the general public who end up carrying this huge burden of tax defaults in billions of rupees by corrupt businessmen. People have been made to undergo all hardships due to these defaults with no government taking effective measures to recover defaulted tax money with surcharges from those who defraud. Instead of recovering defaulted tax money with penalties from corrupt defrauding businessmen, governments impose and increase indirect taxes on people who thus become unnecessarily punished,” the letter adds.

The FTZ&GSEU further urges the MPs to take the following measures in this regard :

  • Request the Minister of Finance to present a detailed report to Parliament including the names of businessmen who are related to tax frauds mentioned above, before the next budget is presented in parliament and also adopt resolutions in parliament to,
  • Immediately suspend the income tax imposed on personal incomes of one hundred thousand rupees (100,000) and above, until a final decision is taken by the NLAC on information provided by the ministry of finance on tax defrauds and
  • Remove the total VAT imposed on essential consumer goods and suspend the social security contribution levy of 2.5 percent in force with effect from the 01 st October 2022.

The complete letter of the FTZ&GSEU is as follows :

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Rs. 20 Bn loan lifeline for SMEs

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The government has taken measures to implement a Rs.20 billion credit scheme to revive the micro, small and medium enterprise sector in Sri Lanka.  

Accordingly, the Cabinet of Ministers has granted its consent to the proposal forwarded by President Ranil Wickremesinghe in his capacity as the Finance, Economic Stabilization and National Policies Minister to implement a credit scheme to revive the micro, small and medium enterprise sector.

Speaking at the weekly Cabinet media briefing held yesterday at the Government Information Department, Cabinet Spokesman, Transport, Highways and Mass Media Minister Dr. Bandula Gunawardhana said the proposed Rs.20 billion will be spent on the entire project which has two components.

“Out of this, Rs.15 billion will be used to strengthen existing and new enterprises and the remaining amount of Rs.five billion will be used to support enterprises under the non-performing loan category.

A significant number of small and medium scale entrepreneurs involved in manufacturing, import, export, tourism, apparel and various other commercial operations have found it very difficult to continue running their enterprises as a result of the economic downturn and the impact of external factors beyond their control.

The Asian Development Bank has agreed to provide working capital support for the Small and Medium Enterprise sector as a relief. The proposed programme is intended to provide credit facilities to existing micro, small and medium scale enterprises for further expansion and recovery of their businesses through licensed commercial banks and licensed specialised banks at concessional interest rates.

(dailynews.lk)

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Won’t be able to offer SriLankan to investors even for free – Minister

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Ports, Shipping, and Aviation Minister Nimal Siripala de Silva yesterday (26) spoke firmly on the national carrier – SriLankan Airlines, stating that the airline’s disruptive employees and tarnished reputation would deter potential buyers in the privatisation process.

Speaking at a media briefing yesterday, he said  “We cannot run an airline with disruptive employees. This is a critical moment for SriLankan Airlines. We cannot afford to entertain employees who fail to handle situations under pressure.”

“The deadline for the Expressions of Interest (EOIs) is set for 5 March and in the present scenario, according to the information I received some of the bidders want to withdraw. With the negative reputation plaguing the airline, we will not be in a position to offer it free-of-charge even,” the minister claimed.

However, SriLankan Airlines Chairman Ashok Pathirage’s views had contrasted starkly with that of Minister de Silva.

The discussion saw a disagreement regarding ground handling. Minister De Silva advocated for immediate privatization of the service, citing shortcomings. Chairman Pathirage, while acknowledging areas for improvement, argued that the lack of aircraft, not ground handling, was the primary issue. He blamed lengthy government procurement procedures for hindering fleet acquisition.

De Silva justified his push for privatization by citing the airline’s struggles and reports of potential bidders withdrawing their interest. While not inherently opposed to privatization, Pathirage emphasized the ongoing process and the lack of control the airline has in the decision.

Meanwhile, trade union representatives commended Pathirage for his leadership whilst blaming political interventions and its past management. 

“We all undoubtedly praise the Chairman for his leadership and unwavering commitment to operate this airline amidst all odds. Neither the employees nor the current management of the SriLankan Airlines are responsible for the cancellations and bad reputation, but the political intervention,” they stated.

They also slammed the former COPE Chairmen and MPs Dr. Harsha de Silva and Dr. Charitha Herath for disrupting the lease procedure of the airline when the aircraft were at a lower price. “They are responsible for all the operational delays the airline is facing at present,” they claimed.

(Excerpts : DailyFT)

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Australia’s United Petroleum enters SL market

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Australia’s United Petroleum has entered into an agreement with the Sri Lankan government to supply petroleum products to the Sri Lankan market.

According to United Petroleum Lanka, Australia’s United Petroleum entered into the relevant agreement with Sri Lanka’s Ministry of Power and Energy on Feb 22.

Following the signing of the agreement, United Petroleum is assigned 150 existing fuel stations and also has the right to build 50 new fuel stations in Sri Lanka.

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