Wednesday, 13 March 2019 06:00

Budget passes first hurdle

Budget 2019 second reading passed in Parliament
119 MPs voted in favour, 76 against, 30 MPs absent at time of vote
Budget 2019 is engine for entrepreneurs: Mangala
Insists Budget not about hand-outs but creating entrepreneurs
Plans to restart giving vehicle permits from 1 May
Defends taxing foreign transactions by credit cards, says it will create local e-commerce boost

Finance Minister Mangala Samaraweera yesterday batted away criticisms,defending Budget 2019 as an engine for creating entrepreneurs,while outlining measures to resume vehicle permits from 1 May, and create more space for local e-commerce sites by charging 3% NBT on credit card transactions on foreign transactions.

The second reading of the Appropriation Bill 2019 received parliamentary approval yesterday, with 119 lawmakers voting in favour while 76 were against it. At the time the division was taken, 30 lawmakers were not present in Parliament. The final budget vote is scheduled for 5 April.

Summing up the salient features of Budget 2019, themed ‘Enterprise Sri Lanka – Empowering the People and Nurturing the Poor’, Finance Minister Mangala Samaraweera told Parliament he has no hesitation to what the Opposition has to, say or the obstacles that would come in his way to prevent taking the country forward.

Criticising the RajapaksaGovernment, the Minister held the constitutional crisis hadimpacted the nation heavily, and said the cost should be recovered by those who were a part of it.

Rejecting the Opposition charges of giving false hopes and selling unrealisable dreams, the Minister blamed the former Government for supporting unscrupulous microcredit issuing companies. In this year’s Budget speech, he told Parliament debt relief has been provided for about 45,000 women who are residents of the drought-affected districts of Trincomalee, Ampara, Batticaloa, Jaffna,Mullaitivu, Kilinochchi, Vavuniya, Mannar, Kurunegala, Puttalam, Anuradhapura and Polonnaruwa, who have availed themselves of micro-finance loans, up to a maximum of Rs.100,000 (initial capital) and outstanding for at least 3 consecutive months, since June 2018.

Promoting reconciliation has helped the Government to get more favourable responses from the international community, he said.The Minister questioned the Opposition as to why they dislike peace and harmony. “Is it treason to talk about racial harmony? We managed to win the GSP plus as a result of the harmony now prevailing in the country. Europe didn’t gain anything by providing us GSP plus. It is us who gets the advantage from GSP plus,” he held.

The Minister, in his speech responding to the Opposition,said Sri Lanka lost its credit ratings during the 52-day constitutional crisis, which resulted in the Government struggling to gain funds for debt repayment.

Presenting this year’s Budget, the Government tabled its hopes for growth led by private enterprise, and have identified it as a part of the ‘Enterprise Sri Lanka’ that was introduced in the previous ‘Blue Green Budget’. According to the Minister, the genuine entrepreneur who uses ingenuity to compete in a fair market, the small and mid-size businesses that embody the spirit of Sri Lankan trade and commerce, and the Sri Lankan companies thatcompete on the global stage and win, will be able to go forward using the facilities in Budget 2019.

“Budget 2019 is aimed at encouraging entrepreneurs and increasing production, rather than making the entire country dependent on the Government. We are putting our best foot forward to enable them to have skills, rather providing them with free food. It is true that there is no concessionary food is offered in Budget 2019. We want to create people who can stand on their feet. The Government has allocated money for the development of agriculture, rather than providing subsidised fertiliser. We want the farmers to be entrepreneurs. We have catered for the safekeeping of agriculture products in warehouses and freezers. Enterprise Sri Lanka has provided more facilities to start your own business. We have allocated Rs.1.3 billion for the development of the fisheries harbours and anchorages,” he said.

Rejecting the Opposition allegation of putting up a barrier that discourages imports of small vehicles, the Minister said: “There were so many small vehicles imported to Sri Lanka last year. It was more like a vehicle tsunami that clogged the roads by sending out our valued foreign currency. However, since last Friday we have removed the 100% cash margin. In terms of the vehicle permits, discussions are underway to remove barriers along with the appreciation of the Sri Lankan rupee. Most probably this will be allowed from 1 May.”

According to Samaraweera, no account receiving less than Rs.50,000 interest will be subjected to tax. “It falls that we have started to tax the children’s savings accounts. You will have to have at least Rs.1.2 million in your account to receive an interest of Rs.50,000. Perhaps the rich kids of the Opposition lawmakers could enjoy such interest income, but not the average man,” he said.

According to the Minister, 3.5% Nation Building Tax (NBT) will be enforced on purchases made through foreign websites, and advertisements placed on social media platforms. “There is a levy of 3.5% NBT applied on Internet purchases made from abroad. Facebook advertising will also be affected. However, it will not be applied on the local website and e-commerce transactions. So, it will only replace the stamp fee. In terms of the accommodation provided for the tourists, the hotels with over five rooms will have to be registered with Sri Lanka Tourism. Places less than five rooms may not need to register,” he explained, making room for more e-commerce sites to come up in Sri Lanka.

Touching upon the State sector salaries, the Minister held that the current Government was responsible for increasing the salaries 107% during the last three years. “We have increased salaries of all State sectors, and this year we have provided an allowance of Rs.2,500 until the schemes are made. You were only using the military for marketing purposes. But we have increased their allowances. We have increased the salaries of police by 40% by our Government and their allowances,” he noted.

(FT)

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