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VAT hike required to fund salary increase demanded by striking govt. employees

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Secretary to the Treasury Mr. Mahinda Siriwardana stated that granting the salary increase demanded by striking public servants would necessitate raising the current VAT from 18% to between 20% and 21%.

He emphasized that the government cannot impose such a burden on the public. Mr. Siriwardana made these remarks during a discussion held today (08) at the Presidential Secretariat, chaired by President Ranil Wickremesinghe, concerning the demands of public service trade unions.

The discussion addressed the trade union actions taken by several trade unions in the public service and explored potential positive solutions to their demands. It was noted that while a salary increase is not feasible this year, there is a plan to revise public service salaries in the 2025 budget, based on recommendations from an expert committee investigating salary disparities.

The Treasury Secretary highlighted that a salary increase of Rs. 10,000 for government employees would require an additional Rs. 140 billion annually, and an increase of Rs. 20,000 would necessitate an additional Rs. 280 billion.

To generate the required income, even with optimal management of current revenues, additional tax increases will be necessary, the Treasury Secretary pointed out. Specifically, he noted that to raise salaries by Rs. 10,000, the VAT would need to be increased by 2%. 

Furthermore, to meet the wage demands of the trade unions, the VAT would need to be raised by more than 3%. He emphasized that this is not feasible at this time, as the VAT is already at a maximum rate of 18%.

The Treasury Secretary also explained that, due to the government’s efforts to stabilize the country’s economy, the Central Bank can no longer print money as it did before. Doing so would jeopardize the program with the International Monetary Fund.

Senior Advisor to the President on Economic Affairs, Dr. R.H.S. Samaratunga, remarked that while increasing public servants’ salaries again this year is challenging, the President has committed to allocating funds for this in next year’s budget. He also mentioned that a separate expert committee has been appointed to study and report on salary discrepancies.

The discussion included President’s Secretary Mr. Saman Ekanayake and a group of senior government officials.

(President’s Media Division)

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Prasanna urges Ranil to declare candidacy promptly

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During a spirited rally in Kadawatha today, Minister Prasanna Ranatunga passionately urged President Ranil Wickremesinghe to promptly announce his candidacy for the presidency within the upcoming week.

“The people of Gampaha eagerly await your decision. Please do not delay any further in declaring your intention to contest,” Minister Ranatunga urged with conviction.

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Harin awards Rs. 1M to Olympic athletes

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Minister of Sports and Youth Affairs Harin Fernando has awarded financial sponsorship cheques of Rs. 1 million each to six athletes participating in the 2024 Paris Olympic Games. 

Additionally, prize money totaling Rs. 1280 lakh was distributed to athletes and coaches who secured medals and top-eight positions in the last Asian and Paralympic Games in Hangzhou, China.

Young sprinter Tharushi was among the highly rewarded, receiving Rs. 15 million for her Asian Games gold medal along with another Rs. 2.5 million for her relay medal.

Minister Fernando emphasized the significance of encouraging athletes even amidst the country’s financial crisis. 

He expressed his commitment to promoting sports and highlighted the importance of discipline in representing Sri Lanka. He urged athletes to dedicate themselves to achieving victory, meeting the high expectations of the nation.

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Former INSSSL Director General Asanka Abeygunasekara arrested

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The former Director General of the Institute of National Security Studies of Sri Lanka (INSSSL) Asanka Abeygunasekara has been arrested by police.

Abeygunasekara, against whom there was a pending open warrant over a case filed by the Inland Revenue Department (IRD), was arrested at the Bandaranaike International Airport (BIA) in Katunayake this morning (21), police said.

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