The Island
January 29, 2015, 10:12 pm
* Public sector receives Rs. 5,000 salary increase
* Rs. 2,500 salary hike to pvt sector suggested
* Prices of several essential items, domestic gas down
* Higher interest rate (15%) for senior citizens
* Relief for farmers t, fertilizer subsidy stays
* Kerosene price further down to help estate workers
* Education allocation raised to 6 % of GDP
* Dual citizenship available at a huge fee
* PAYE: first Rs. 750,000 exempted from tax
* Dayata Kirula funds divided among MPs
* Rs. 1 mn mansion tax on palatial houses
by Saman Indrajith
Finance Minister Ravi Karunanayake making a special statement on the 100-day programme of the new government told Parliament yesterday that the government would increase the salaries of public sector workers by Rs. 10,000, half of which would be paid with their February salaries and the balance would be paid from June this year.
Finance Minister Karunanayake said that the government had also requested the employers of the private sector to increase salaries by Rs. 2,500 a month. The government would increase the pension payments by Rs. 1,000 in addition to the increments granted to them by the previous government’s last budget.
The price of a domestic gas cylinder would be reduced by Rs. 300, 400 grammes of milk powder by Rs 61 and 400 grammes of Sustagen milk powder by Rs 100. The price of a kilo of wheat flour would be reduced by Rs. 12.50 and that would help reduce bread prices by Rs. 6.00 a loaf the minister suggested.
He said the price of a kilo of sugar would be reduced by Rs. 10, a kilo of green gram by Rs. 10, a kilo of sprats by Rs. 15, one litre of kerosene by Rs. 6, price of canned fish by Rs 60, price of Maldives fish by Rs 200, and one kilo of chilli powder by Rs 25.
"The current Special Commodity levy on coriander neither crushed nor ground is Rs. 46 and that will be reduced by Rs. 20 to Rs. 26 per kilo."
Those price reductions would be effected from mid night yesterday, the minister said.
"We know low interest rates in the market have created serious problems to the senior citizens in the country. There are a significant number of senior citizens who sustain themselves with the monthly interest income that they receive on their deposits. I am happy to announce that the senior citizens will be receiving a higher interest rate of 15% per annum for their savings up to a maximum of one million rupees for funds deposited in commercial banks," the Minister said.
He said that relief measures would also be provided to farmers. "I am pleased to announce that as a relief measure, a 50% waiver will be provided for a maximum loan of Rs. 100,000 on the loans advanced to farmers by commercial banks and presently overdue. This will cost the government Rs. 2,500 million."
The fertilizer relief provided to farmers at a subsidized rate would be continued, he said.
The Minister said the government would stop the Deyata Kirula Programme and the money saved thus would be used to increase the funds provided to MPs under the decentralized budget from Rs. 5 million to 10 million each.
Minister Karunanayake said that the government would allocate six per cent of the GDP to the education sector development and suggested to provide an allowance of Rs. 2,000 to each Sunday Dhamma school teacher.
The government would increase healthcare expenditure by 3 per cent of the GDP. "As the main health service provider, the government has a major role to play in this regard. Therefore, the government will be initiating steps to increase its spending on health care to around 3 per cent of GDP over the years compared to 1.4 per cent of GDP in 2013," he said.
"The funding requirements to ensure a 24 hour OPD service at all hospitals, assistance to CKDU patients and a concerted effort to bring down the numbers awaiting surgery will be implemented in consultation with the Ministry of Health and Indigenous Medicine. In order to give a special grant for CKDU patients, Rs 2,000 million has been allocated for 2015", Karunanayake noted.
Explaining the concessions to be granted to the Colombo City dwellers relocated against their will the Minister said: "Our government will bear the initial advance of Rs. 100,000 per family borne by the relocated and also bear a part of the rental up to Rs. 250 per month over a period of 240 months.
"We have reduced the price of diesel by 14.4% to Rs. 95 a litre. Petrol price was reduced by 22% to Rs. 117 per litre and kerosene price reduction was 20% to Rs. 65 per litre. With a view to further supporting the estate community, fishing community, small time vegetable growers and the SME sector, I propose to reduce the Kerosene price by another Rs. 6 per litre with immediate effect bringing down the price to Rs. 59 per litre. Don’t you think that these are commendable measures? Though the domestic petrol, diesel and kerosene prices were reduced in September and December 2014, the price reductions did not necessarily reflect the magnitude of the decline in international prices, which took place during the rule of the previous regime.
"Further, as a measure to encourage alternative energy sources and to curtail government expenditure, I propose to install solar units in government entities whose consumption consists of a value which will provide a return on capital invested on the equipment within a period of 7 years or less. This would have a long term impact on our fuel bill. Based on current negotiations, the Bus fares will be reduced by a minimum of 10% and the school van fares by a minimum of 5% providing further relief to the people," he said.
Explaining the revenue proposals, Minister Karunanayake said: "A tax termed as Mansion Tax of Rs. 1 million will be levied on owners of all houses valued at Rs. 100 million or more or on houses above 5,000 square feet whichever is higher on an annual basis. The relevant tax would be collected on an annual basis commencing 2015 through the local government authorities. This will be in addition to local authority rates and taxes.
"Our government invites all Sri Lankans to serve the nation to the best of their ability instead of leaving Sri Lanka. However, if they so desire to permanently leave Sri Lanka I propose a tax of 20% on all such foreign exchange released to be taken out of the country by them at the point of emigration.
"Dual citizenship option to be provided to all with a Sri Lankan origin and upon due evaluation to be granted the dual citizenship preceding the payment of Rs. 500,000 per individual request. Further, provision will be made for foreigners seeking resident status in Sri Lanka who are in a position to invest USD 10 million. All such resident status in Sri Lanka will be subjected to the approval of Defence Ministry, which will be renewed every 5 years. The visa fee will be Rs. 2.5 million for such persons.
"I would like to propose a Super Gain Tax, which will be a one-off payment. Accordingly, any company or individual who has earned profits over Rs. 2,000 million in the tax year 2013/2014 will be liable to pay 25% of their profit. This will help reverse the ill-gotten gains of these companies back to the general public. The expected revenue from this will be Rs. 50,000 million in 2015.
"Under the present tax regime, the first Rs. 600,000 from the employment income is exempted from the Pay-As-You-Earn (PAYE) tax. In order to provide a further relief to the PAYE taxpayers, this amount is proposed to increase to Rs. 750,000 with effect from 01 April 2015."
Pointing to the income tax concessions granted for economically backward regions, the Minister said: "The undeveloped regions in the country desperately need enhanced investments to create employment opportunities and reduce regional poverty. Hence, there is a need to encourage investors who are willing to invest those regions, which will be named by the Commissioner General of Inland Revenue. Accordingly, the profits earned under these projects will be taxed at a 50% of the normal income tax rate."
"In order to encourage low income families to purchase a motor car to improve their living standards, I propose to reduce the taxes applicable on the motor cars with engine capacity less than 1,000 cc by around 15%. The present tax structure on motor vehicles has created an unhealthy disparity between hybrid and normal motor cars. In order to rectify this anomaly, I propose to revise the excise taxes applicable on hybrid vehicles. These changes will be implemented from mid night today."
Click here to view this at www.island.lk
No comments:
Post a Comment