Dr. Harsha de Silva, Member of Parliament instructed the Auditor General’s Department to calculate the amount of wheat flour currently available in Sri Lanka’s warehouses and submit a forensic audit report regarding the issue pertaining to Wheat flour within 2 months.
The Parliamentarian was of the view that if there is a price formula for wheat Flour as well, there will be no opportunity to decide the prices according to the wishes of individual parties.
This was discussed when the Committee on Public Finance met recently under the Chairmanship of Hon. (Dr.) Harsha de Silva, Member of Parliament.
The Members of the Committee pointed out that Wheat Flour is being sold at different prices in shops all over Sri Lanka. However, according to the prices given by the Ministry of Finance, one kilo of Wheat Flour can be sold for 198 rupees. The Chair emphasized that two price calculations are being used in setting the price of Wheat Flour and this should be changed.
Although the price has increased due to the increase in the tax imposed on Wheat Flour, the Chair stated to the officials that the increased tax has increased the price of the Wheat Flour that was already in the warehouses of the country.
Price formula needed to regulate wheat price
Recalling the efforts made to prepare a price formula for gas and milk powder last season, the chairman pointed out the dire need of a price formula for regulating the price of wheat. The Committee emphasized that a price formula should be prepared immediately in order to work in a more diversified manner.
CoPF approves tax reductions on more goods under the Singapore -SL FTA
Furthermore, under the Singapore-Sri Lanka Free Trade Agreement, the Committee on Public Finance approved the reduction of taxes on many other goods. It was approved when the Resolution under the Customs Ordinance published under the Gazette Extraordinary No. 2338/54 was discussed on June 30th, 2023.
Under the said, it was proposed to reduce the tax rate which was 15% to 5%. Granting approval for the said, the Committee questioned the officials regarding the benefits of this trade agreement. However, the official responding to the said stated that it was not possible to conduct a feasibility study. Expressing his displeasure, the Chair instructed the chief officer in charge of the Singapore-Sri Lanka Free Trade Agreement to submit a report to the Committee within 6 weeks, presenting logical facts about the agreement.
Resolutions under the Customs Ordinance published under the Gazette Extraordinary No. 2336/72 on 16th June 2023 was further reviewed for a second time. However, the Committee decided not to approve the proposal made under this Gazette. Here, the officials presented a proposal to change the HS code related to the import of raw materials required for soap production. The Committee questioned whether there will be an increase in tax rates on the import of the relevant raw materials. Accordingly, the Chair pointed out that it is questionable for one group of the government to request for the approval to reduce tax and another group to request to increase taxes. In the year 2021, it was revealed to the Committee that no new investment has been made during that period, even though the tax charges have been reduced in the import of raw materials required for soap production. Accordingly, the Chair instructed the concerned officials to conduct a discussion under the leadership of the Secretary to the Ministry of Finance to formulate a policy on tax revision and submit it to the committee.
Furthermore, 2 other gazettes submitted for the Committee’s approval regarding the tax revision under the Special Commodity Levy Act No. 48 of 2007 were approved.
Meanwhile, the Committee discussed the current status of the process related to the establishment of a Gambling Regulatory Authority. Officials stated that they have discussed with several organizations in Singapore and Sri Lanka and have prepared a draft. However, before preparing a final Bill, the Chair instructed the officials to refer the draft to the Committee on Public Finance for approval. Accordingly, the Committee was instructed to provide a comparative report within two weeks pertaining to the existing system in Singapore and the model expected to be created in Sri Lanka regarding the establishment of a Gambling Regulatory Authority.
Furthermore, the Committee instructed the Sri Lanka Board of Investment to submit a detailed report including the amount of investment and its benefits in the last period.
Moreover, during the discussion regarding other matters taken up at the Committee, Hon. Nimal Lanza, Member of Parliament questioned the Sri Lanka Board of Investment regarding the decision made to import palm trees from a foreign country and add value to them and re-export them to India. The Member of Parliament stated that there is a danger of this matter developing into a diplomatic concern. Accordingly, the Parliamentarian requested the Sri Lanka Investment Board to inform the other parties concerned to reconsider the decision.
State Minister Hon. (Dr.) Suren Raghavan, Members of Parliament Hon. Rauff Hakeem, Hon. Patali Champika Ranawaka, Hon. Mahindananda Aluthgamage, Hon. Nimal Lanza, Hon. Harshana Rajakaruna, Hon. Madhura Withanage were present at the Committee meeting held.
SL records record tourist arrivals in November
Sri Lanka Tourism has recorded its highest arrivals figure mark for a month in November after a lapse of nearly 4 years.
The November 2023 arrivals hit 151,496, passing the previous best of 143,039 recorded in July 2023.
The November arrivals figure also is a 153.5% increase against 2022 November which was 59,759.
With this the total number of arrivals from January to November end was at 1,276,951 in comparison 719,978 arrivals recorded in the entire last year.
Once again for the seventh month in succession India was the best course destination for Sri Lanka fielding 30,339 tourists and accounting to 20% of total arrivals for November.
The Russian Federation was in second place with 24,912 (16%) arrivals while Germany (12,331) and the United Kingdom (11,526) were the third and fourth source markets for Sri Lanka. Australia (7,900) and China (6,673) remained fifth and sixth.
SriLankan doubles Colombo – Mumbai daily flights
SriLankan Airlines has introduced double daily flights between Colombo and Mumbai, multiplying the convenience for passengers travelling to and from India’s financial and entertainment capital, the Sri Lanka’s national carrier announced.
In a statement, SriLankan Airlines said the new double daily service to Mumbai will not only give a 50 per cent boost to SriLankan’s capacity on its Mumbai route, but will also strengthen the airline’s already vast network in India.
Flights UL 142 and UL 144 will depart daily from Mumbai to Colombo at 3:10hrs and 20:45hrs and flights UL 141 and UL 143 from Colombo to Mumbai will depart at 23:45hrs and 17:10hrs, respectively, according to SriLankan Airlines.
Thus, passengers travelling out of Mumbai on SriLankan Airlines will now have the advantage of more flight options to Colombo and convenient connections via Colombo to popular destinations in the Far East, Europe and Australia including Singapore, Kuala Lumpur, Bangkok, London, Frankfurt, Paris, Melbourne and Sydney.
Meanwhile, the Head of Worldwide Sales and Distribution of SriLankan Airlines Dimuthu Tennakoon stated: “The Indian market has been incredibly important to SriLankan Airlines since the get-go, and with India fast becoming one of the world’s largest outbound travel markets, we are only happy to expand our operations in one of India’s most celebrated cities and make travel between Mumbai and Colombo extra seamless. Our frequency increase comes on the heels of Sri Lanka announcing free visa for Indian visitors and we hope that these positive developments will encourage more travellers from Mumbai to stop by Sri Lanka.”
India is the only country with nine cities featured in SriLankan Airlines’ network. This includes Delhi, Bangalore, Hyderabad, Kochi, Trivandrum, Chennai, Trichy and Madurai in addition to Mumbai, to which altogether SriLankan operates close to 100 flights every week.
Given the geographic and cultural proximity of the two countries, most Indians are likely to find a welcoming familiarity in Sri Lanka not found elsewhere, and SriLankan Airlines is the best bet for Indians who want to experience the best of both worlds onboard, it added.
For more information in this regard and bookings you can visit the official website of SriLankan Airlines through www.srilankan.com
Removal of VAT exemptions, doesn’t affect UBER & PickME fares – CoPF
The Committee on Public Finance (CoPF) has taken into consideration the Value Added Tax (Amendment) Bill which aims to remove VAT exemptions on certain items and includes provisions to discontinue the Simplified VAT (SVAT) system.
An official representing the Ministry of Finance stated that agricultural machinery and other equipment including chemical fertilizer which was listed as exempted previously will be VAT liable under the said Bill. Adding to the said, officials stated that agricultural seeds, agricultural plants, shrimp feed inclusive of prawn feed and animal feed excluding poultry feed will however be exempted from VAT.
Thus, the Committee questioned the rationale behind including VAT for agricultural items which will impact the domestic agricultural and food industry. The aforesaid was taken up for discussion at the Committee on Public Finance held recently (28) in Parliament, Chaired by Dr. Harsha de Silva when the Committee met to consider the Value Added Tax (Amendment) Bill, The Finance Bill to amend the Finance Act, No. 35 of 2018 and the Finance Act, No. 12 of 2012 and the Imports and Exports Control Act pertaining to the Gazette No. 2353/16.
Furthermore, dairy products such as liquid milk and eggs will also be liable for the VAT. However, the Ministry of Finance stated that wheat, wheat flour or powdered milk, pharmaceutical products, drugs will be exempted. The Committee questioning the officials inquired why food products made out of grains cultivated in Sri Lanka, identified as high protein and high energy agro foods falling in the category of “Posha” is subjected to VAT in a context where Child malnourishment is considered to be on the rise.
The Committee questioned the officials as to why ambulances and medical equipment are being subjected to VAT. After thoroughly examining the Value Added Tax (Amendment) Bill, the Committee has granted approval, contingent upon the Ministry of Finance incorporating the amendments proposed by the Committee on Public Finance, provided they are in accord. Nevertheless, the Committee has urged the officials present to reevaluate VAT exemptions for medical equipment, ambulances, fertilizer, and food products derived from grains classified as high-protein agro foods and agricultural items.
No impact for UBER and PickME
The Committee of Public Finance further revealed that the elimination of VAT exemptions will not impact the fares of UBER and PickME. Dr. Harsha de Silva, the Committee Chair, emphasized that as UBER and PickME have included VAT since their inception, contrary to other beliefs, thus the proposed VAT changes will only result in a 3% rise without significantly affecting the ultimate fare that customers are required to pay.
The Committee on Public Finance also took into consideration the Finance Bill to amend the Finance Act, No. 35 of 2018 and the Finance Act, No. 12 of 2012 which propose provisions to release motor vehicles imported into Sri Lanka which were not cleared from customs due to import restrictions or non-payment of taxes. However, given the matters arising from importing and opening LCs post the suspension of motor vehicle imports by Gazette Extraordinary No. 2176/19 dated May 22, 2020, under the Import and Export Control Act, the Committee Chair instructed the Ministry of Finance to submit a report on the provisions to release 119 imported vehicles yet to be cleared from customs. The Committee thus decided to reconsider the said from thereon.
Moreover, following the consideration of the Imports and Exports Control Act pertaining to the Gazette No. 2353/16, the Committee approved the said.
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