Govt. calls for CB report on cash withdrawal tax

15 December 2015 03:05 am - 0     - {{hitsCtrl.values.hits}}

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Announcing a number of amendments to the revenue proposals presented in Budget 2016, Prime Minister Ranil Wickremesinghe yesterday said a report has been called from the Central Bank on the Budget proposal to tax the cash withdrawals from banks.

Budget 2016 proposed to charge a 2 percent withdrawal charge for cash withdrawals between Rs.1 million and Rs.10 million, and 3 percent for anything above. 

That is, a person withdrawing Rs.1 million has no choice but to pay Rs.20,000 to the government.  

Despite many saying that a move like this would discourage bank savings, the Prime Minister yesterday stressed that the government is committed to cultivating the savings habit among the people. 

Providing clarity to a very sensitive issue, Wickremesinghe assured the continuation of the existing pensions system of the state-sector employees and stressed that a change in the pension methodology would be applicable to those who join the public sector from 2016.

He noted that the current “unfunded” pension system would not be adequate to provide pension benefits to an increasingly ageing population in Sri Lanka, who enjoy a higher life expectancy rate. 

Wickremesinghe averred that he was not ready to take popular but wrong economic decisions to be in power.

Wickremesinghe also promised to include the Rs.10,000 public sector salary increase to the basic salary of the employees in three stages. Accordingly, Rs.2000 will be added to the public-sector employees’ basic salary from next year.

Meanwhile, the Prime Minister said that the annual revenue licensing fee for vehicles would be reduced from 25 percent to 15 percent along with the introduction of an interim vehicle emission test fee of Rs.1,500 instead of the Rs.5,000 fee proposed in Budget 2016.

Apart from that, the lease valuation fee would also be reduced to Rs.5,000 for cars and Rs.3,000 for three-wheelers and motorbikes.

The government is also to introduce a new minimum wage for public and private sector workers and is to bring regulations to parliament pertaining to a Rs.2,500 salary hike to the private sector. 

Several trade unions earlier said that they were to launch an islandwide 24-hour general strike from midnight yesterday if the government failed to address their grievances.

However, following Wickremesinghe’s statement, almost all trade unions yesterday announced that they were calling off the planned strike. 
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