Finance Minister Ravi Karunanayake said today the budget proposal to impose a levy on cash withdrawals was meant to encourage the use of bank drafts and cheques for the transferring of cash.
The government in its 2016 Budget proposed that a levy be imposed on cash withdrawals of Rs.1 million and above. According to the proposal, a 2 percent levy would be imposed on cash withdrawals between Rs.1 million and Rs.10 million while 3 percent would be levied on cash withdrawals exceeding Rs.10 million.
“This proposal is meant to encourage the use of bank drafts and cheques instead of cash withdrawals of Rs.1 million and above,” the minister said.
Another budget proposal is to transfer all funds lying in dormant bank accounts to the Consolidated Fund, by January 1, 2016.
The Finance Minister said the money would be held in the consolidated fund as long as the accounts are inactive and the Central Bank would release the funds when a customer wished to reactivate the account. “This is not a means of confiscating the funds,” he said. (Lahiru Pothmulla)
I am shocked and amazed of this reasoning. This will only drive away the savers from banks.. People save for weddings, for education, home building etc. How can you justify punishing people for saving. If you take some money off the interest paid I can understand. It is not practical to use cheques as cost of having a cheque account is quite high. This scheme will encourage people to borrow and spend. Just madness. I do not think anyone will agree to this. This will be the death knell of the government. I am saying this as a person who had been supporting you and your government before you came in to power.
Sadun Tuesday, 01 December 2015 04:41 PM
Do you even know what NRFC mean?
BuffaloaCitizen Tuesday, 01 December 2015 05:03 PM
Spurious comment. Can u specify how that can happen?
SKS Tuesday, 01 December 2015 05:10 PM
I personally like this idea. I would not carry even half a million in cash, even if it does not include any charge. Look at the spate of robberies. Besides, you have a record of the transaction, if you use a credit card or a bank draft.
BUSHEL Tuesday, 01 December 2015 05:33 PM
Minister, it is not an encouragement. It is a levy or rather a punishment to the depositor. Really what you should do is pay 1% for those who are not withdrawing cash. That is an incentive or a true encouragement. Now people are dam wild. This is a typical explanations like cutting the neck and saying it is done for the benefit of the person. Very often your explanations are like this.
Karunka Hora Tuesday, 01 December 2015 07:16 PM
Country and its population finished, with this yahaoalana looters rule
Real Minister of Finance Tuesday, 01 December 2015 07:16 PM
So...you are telling us that if I want to withdraw my money I have to pay you?
Dilan Tuesday, 01 December 2015 11:28 PM
Good idea . No cash crises and may be black money are will be reduce so encourage to credit card cut the stamp duty charges
MAN Tuesday, 01 December 2015 11:42 PM
Ravi. try to use assist the entrepreneurs by developing better infrastructure rather than trying to cover up the govnt. drawbacks by making people pay the price.I feel you do not have confidence.
gamage Tuesday, 01 December 2015 04:07 PM
in a simple term Rs.20,000 per 1 million ?????/what a shame
saman Wednesday, 02 December 2015 03:46 AM
Enjoy Yahapaalana thing people!
Pillai Wednesday, 02 December 2015 05:49 AM
Peoples will very soon apart from the bank for transactions. Ha ha. Black money will be build up by each individuals. Hon. Ravi ( OR Ravi) going to eleminate the banks.After two years he will ban money also.Very soon Mahinda will come to power. Peoples will not understand ravi rubbish logic. Similar to duty free vehicle explanation.
Cobra Wednesday, 02 December 2015 06:31 AM
This is the kind of nonsense that the opposition loves to hear, so give them some more!!!!
Hmmm Wednesday, 02 December 2015 05:21 PM
Has anyone commenting here against this move ever withdrawn over one million cash from their account? :D
Podge Thursday, 03 December 2015 03:33 PM
Consolidated fund will go missing sooner or later nothing new for Ravi
Podge Thursday, 03 December 2015 03:35 PM
Bankrupt govt have no clue where to collect revenue
SS Wednesday, 06 January 2016 05:27 PM
Give one rupee to the cash counter to withraw Rs.1MN then you save Rs.20,000?
Bala Tuesday, 01 December 2015 02:49 PM
And more importantly, illegal movements of cash for nefarious activities can be traced as there will be some record.
Willa Tuesday, 01 December 2015 03:56 PM
Robbery by the GOSL
Wildwine Tuesday, 01 December 2015 03:56 PM
A person willing to pay a bribe of more than 1M will not be discouraged by a fee like this, they will find a way. This will only affect SMEs who genuinely need cash. You can try to give a positive spin; but in reality this withdrawal tax is lame, impractical and will only create administrative hassle.
Banda Tuesday, 01 December 2015 03:49 PM
A very good move. We need to move to a cashless era sooner than later. Can the ministry or central bank also review charges / fees levied by banks and other financial institutions and introduce some control over them. And unsolicited upgrading of credit cards which are issued free of charge for the first year.
chamithroshanwijenayake Tuesday, 01 December 2015 03:43 PM
It is an effective decisions to mitigate financial frauds
Mandy Tuesday, 01 December 2015 03:39 PM
But it may be a per day basis - still not sure. So you have to go to the Bank many a day.
Pramod Fernando Tuesday, 01 December 2015 03:28 PM
How can you withdraw money from any bank without "some" record?
Coconut Republic Tuesday, 01 December 2015 03:27 PM
This act will stop the internal element in the bank playing with the cash too.
BuffaloaCitizen Tuesday, 01 December 2015 03:26 PM
Bank accounts and relevant interest is taxed. If withdrawal is also taxed (irrelevant to the amount), then it is double taxation. A customer has the right to withdraw his money either by making a Bank to Bank transfer, cheque, draft, online whichever he chooses without paying taxes for sch an activity, as this money is his legal and rightful ownership without having to pay a fee similar to casinos.
John Fernando Tuesday, 01 December 2015 03:22 PM
As usual why not put the blame on the previous government and justify your decision.
Samson Tuesday, 01 December 2015 03:13 PM
Does this apply to NRFC accounts as well. If this is the case, I wouldnt be sending my hard earned money home anymore.
thampo Tuesday, 01 December 2015 03:11 PM
yeah i was going to pay a bribe but i will not because now i have to pay a tax to withdraw my money. splendid yahapala logic
lkboy Tuesday, 01 December 2015 03:10 PM
Then ensure seamless and charge-free cash transfer among different banks! that should be a must.
thampo Tuesday, 01 December 2015 03:09 PM
geez you want a tax to have a record. such a lame excuse
Sapu Tuesday, 01 December 2015 02:59 PM
Teh tax will discourage bribes and reduce corruption but what if we withdraw money seperately?
Sapu Tuesday, 01 December 2015 02:56 PM
Its good moving Dormant accounts to a fund but make sure they can be returned if the account is reactivated
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