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Same wine in the old VAT

15 September 2016 12:00 am - 1     - {{hitsCtrl.values.hits}}




After a Cabinet meeting with much deliberation, the government approved the proposal to reintroduce the Value Added Tax (Amendment) Bill, more or less, identical to the original one aborted on a court ruling.  

First, Finance Minister Ravi Karunanayake presented the proposal for consideration, and his colleagues put forth their views for and against some of its provisions. The crux of the matter here is that the government agreed in broad terms that its revenue has to be raised for budgetary support, come what may. All in all, it decided to proceed with the enactment of legislation to give legal effect to the increase of the Value Added Tax (VAT), be it a popular measure or not.   

The government imposed this tax hike earlier, and it went awry after the Supreme Court ruled that the process adopted in introducing it was unconstitutional and against the Standing Orders governing parliamentary businesses. In fact, the Joint Opposition petitioned the Supreme Court in this respect. In precedence to the court intervention, the country witnessed an upheaval against the VAT hike, particularly as wholesale and retail traders took to the street against the broadening of the threshold for tax registration.   

After the Bill was rendered nullity on the last occasion, the government was in a predicament as it opted out of a measure to generate revenue for budgetary support. So, it took fresh initiatives to proceed with it. After careful calculation, the new Bill was presented for Cabinet approval and now it has been gazetted. Next, it is expected to be presented in Parliament next week for enactment.   
 Within seven days upon placing it on the Order Paper of Parliament, the aggrieved parties stand the chance to seek a determination from the Supreme Court on the constitutionality of the Bill. The Court could take up to three weeks if necessary to communicate its determination to the Speaker to be read out to the Legislature.   

Under the current circumstances, it is hard to imagine that there won’t be anyone not opposed to the provisions of the present Bill. As a result, legal action can well be anticipated within seven days upon presentation in the House next week. In such an eventuality, the government will not be in a position to pass the Bill in the House with immediate effect.   

On the previous occasion, the government’s effort was aborted as the due procedure had not been followed in presenting the Bill to the House. According to Article 148 of the Constitution, Parliament has the total control of public finance. Also, a finance Bill should be presented in the House only with the approval of Parliament. The Standing Order 72(b) provides that the Cabinet should signify to Parliament its approval. The government failed in fulling these constitutional obligations on the last occasion, and it led to the nullification of the whole process. This time, with that experience in mind, the government will take care to stick to the procedure in ensuring its passage through Parliament.  
Leave alone all that, Tuesday’s Cabinet meeting witnessed further differences of opinion on the provisions of the Bill in the present form as well. A suggestion came for the exemption of VAT on medical consultation fees. Yet, Minister Karunanayake ruled out the possibility for it, and said medical consultants earned colossally. That, he said, such earnings should be taxed to fill the State coffers. Also, the Cabinet broadly agreed to widen the tax net on the presumption that dodging was very high. In the process to streamline tax collection, the Cabinet discussed at length the possibility of appointing officials specifically designated to collect taxes at divisional level.  


DROs to be called back?
In the past, starting from the colonial period, there were Divisional Revenue Officers assigned for the task. Later, they became Divisional Secretaries with different administrative duties at hand. Again, attention is paid on the need to appoint some official with power similar to that of  DROs for the sole purpose of tax collection.   


Ravi calls for special Cabinet meeting before budget 
Ahead of the 2017 budget to be presented in Parliament on November 10, Minister Karunanayake stressed the need to have a special Cabinet meeting soon to discuss the Appropriation Bill. That is the piece of legislation, presented ahead of the maiden budgetary speech, outlining allocations for each ministry.   

President Maitripala Sirisena and Prime Minister Ranil Wickremesinghe will get back on this matter later to the Cabinet.   


New Party sooner than expected 
The current political situation appears to have precipitated developments towards the formation of a new political movement or rather a party. These days, the Joint Opposition (JO) activists are involved in the creation of different wings of the party for that purpose. Its academic wing is already active under the name of the National University Teachers’ Association (NUTA). Former Minister Basil Rajapaksa, playing a pivotal role in the task, met with the representatives of graduates for another wing. Inside sources said the new formation would come to light sooner than expected as the current trend warranted it.   

These sources noted that there was tremendous pressure emanating from former local government members supportive of ex-President Rajapaksa to form a new entity as otherwise, it would be difficult to organize people effectively against the government.   

The JO contemplated the formation of a new party before the parliamentary elections last year, and a section of it pushed for it rather contesting on the ticket of the United People’s Freedom Alliance (UPFA) under President Maithripala Sirisena as the leader. However, the other section was opposed to the idea at the time fearing that they would incur the blame for splitting the party.  

In retrospect, the JO now sees it as a strategic mistake. With lessons learnt, they seriously consider a new entity at the moment. They believe they could have at least emerged as the main Opposition in Parliament had they contested under a different symbol at that time.   


JVP also for a broad front
Janatha Vimukthi Peramuna (JVP) is also working for the formation of a new political front with like-minded groups and individuals in view of national elections expected way ahead in 2020. The party believes the United National Party (UNP), the main party of the government, will become unpopular among the masses given its policies that do not correspond with ground realities. Likewise, the JVP thinks the Sri Lanka Freedom Party (SLFP) is down the path of political disaster due to internal squabbles triggered by the MR faction pulling in a different direction.   

This, in JVP’s perspective, would create a political vacuum for it to cater to by the time the next elections are declared. As a result, the party’s decision makers are now contemplating strategies to address to people to form a new front.  


Constitutional Proposals likely before budget 
The Steering Committee, appointed by the Constitutional Assembly which is a committee of the whole Parliament, is currently working out Constitutional proposals. It is learnt that the Committee is planning to submit its interim report before the budget for Parliament to consider in drafting the legislation that provides for the new Third Republican Constitution of Sri Lanka.   

The government has committed to the United Nations Human Rights Council (UNHRC) regarding it. Now, it has to deliver to secure the international support. Yet, it does not seem to be a rosy walk for the government in getting consent of all the parties and groups in Parliament on the provisions of the new Constitution. Without support of all in Parliament, the government is not ready to proceed with it and refer it to public approval at a referendum.   

Already, discussions are underway on electoral reforms, power devolution, and executive presidency.   
Ugly public diatribe between Uva CM and 
Uva Province Chief Minister Chamara Sampath Dasanayake and Badulla District UNP MP Chaminda Wijesiri have been on a collision course for a long time due to issues involved in area politics.   
Mr. Wijesiri, using his powers as an MP, raises questions in Parliament regarding wrongdoings of the CM. Last week, he directed a question at Local Government and Provincial Council Minister Faizer Mutapha regarding improper financial dealings of the CM.   

The Minister asked him to sort out personal issues amicably rather than bringing them to Parliament. Likewise, the CM, as the political authority of the Uva Province, is taking on the MP in the same fashion. It has led to an ugly diatribe now.   The reason is clear. Mr. Wijesiri is the former Mayor of the Bandarawela Municipal Council. During his time, he arranged the distribution of trade stalls at a market complex being constructed. In the meantime, he became elected to Parliament, and Mr. Dasanayake became the CM. Mr. Dassanayake has worked out a new plan as the new political authority of the province to allocate trade stalls as he wishes. This led to a confrontation between the two notorious for using strong arm tactics. Mr. Dassanayake is a member of the UPFA.    Recently, a commotion took place at the Badulla District Development Committee meeting. It is chaired by Transport Minister Nimal Siripala de Silva. The CM, who is also the co-chairman of it by virtue of its office. Mr. de Silva began the meeting on time recently and continued it along with Mr. Dassanayake. Both are members of the same party, and that they do not confront each other. After half-an-hour, Mr. Wijesiri arrived and pulled up the chairman. “I am also a chairman. The meeting shouldn’t be held solely in the way you want,” he said.  

 It upset the atmosphere, and finally Mr. Dassanayake and Mr. de Silva left the venue where around 200 public servants were present at the meeting.   


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  • kaboos Monday, 19 September 2016 12:05 PM

    same old drugs in different labels.

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