DEBT LEVY TO BE BORNE BY BANKS

Finance and Media Minister Mangala Samaraweera, International Trade and Development Strategies Minister Malik Samarawickrema and Mano Tittawella, Senior Advisor to the Finance and Media Minister Mangala Samaraweera arriving for the Budget Forum organised by Ernst and Young at the Hilton, Colombo yesterday. Picture by Shan Rupassara

Finance and Mass Media Minister Mangala Samaraweera yesterday cleared any doubts on the newly imposed Debt Repayment Levy.

He reiterated that the said levy must be borne by the banks and could not be passed on to the consumer.

While recapping on his budgetary proposals for 2018, Minister Samaraweera termed the Debt Repayment Levy of Rs. 2 per Rs 10,000 on all cash transactions for three years from April 1, 2018 as the Medamulana Tax.

Minister Samaraweera was addressing his first post-Budget press conference at the Parliamentary Complex yesterday.

“You are well aware of the massive debt repayments due in the next two years. The country’s debt was no different to the Meethotamulla garbage mound when we took office in 2015. Despite that, we have undertaken a lot of development activities in the country. We need some support to confront the debt burden. The banks will get an income tax waiver in return,” he explained.

The Minister said the government introduced a price formula based on the alcohol percentage for liquor in the budget proposals for 2018 with the intention to discourage youth from hard liquor.

“According to global trends, the majority of people in many countries are used to consume soft liquor such as beer and wine, instead of hard liquor. In Sri Lanka, only 13 percent of alcohol users consume soft liquor, while 84 percent are consuming hard liquor. A recent survey conducted by the Colombo University has found that 49 percent of alcohol consumers are addicted to moonshine. Therefore, we should rescue the al public, especially our youth from moonshine,” the minister said.

Minister Samaraweera said tourist guesthouses will be allowed to sell soft liquor under a licence. “Some have expressed fears that after introducing this procedure, everyone will sell liquor even at their homes. It will not be allowed. If a guest house owner wants to get the license he will have to register with the Divisional Secretariat in the area. He should also produce a tax file. Nobody will be able to sell liquor without obtaining a licence,” he added.

Commenting on the Carbon Tax, the minister clarified that it would be higher for old vehicles. “For motor cycles, three-wheelers, Maruti cars and Prado jeeps not older than five years, the carbon tax will be 17 cents, 27 cents, one rupee and Rs.4.10 per day respectively. If they are older than 10 years, the tax will be 51 cents per day for motor cycles, 82 cents per day for three wheelers and Rs.3.25 per day for Maruti cars,” the minister explained.

Questioned by journalists as to why the Carbon tax is imposed on the engine capacity without applying it on the amount of fuel consumption, the Minister clarified that the Government had to choose a simple method to avoid practical difficulties.

The Minister, while agreeing to consider extending the duty reduction on brand new electric cars to include electric cars used for a short period, said the vehicle import duties have been simplified using a new formula.

Clarifying on the tax of Rs.2 per minute for a call per telecommunication tower, the Minster pointed out the reports saying that the call cost would rise by Rs.2 is totally false.

State Finance Minister Eran Wickramaratne explained that the aim of the said tax was to reduce the number of telecom towers and the Government expects the service providing companies to bear the cost without passing it to the consumers.

The minister also elucidated the proposals made in the Budget to regularise the three wheelers, adding that special concessions have been given to import electric three-wheelers.

“Three-wheel drivers will be offered free training by the Tourism Authority and those who complete it will receive a sticker stating ‘Tourist Board approved tuk-tuks’ and even giving a special colour to them is being considered,” he added.

Finance Ministry Secretary Dr. R.H.S. Samaratunga, Deputy Treasury Secretary S.R. Attygalla, Economic Advisors to the Minister Deshal de Mel and Mano Thittawela also attended the media briefing.

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