A new loan scheme with a subsidized interest rate of 7% has been introduced for small and medium enterprises (SMEs), State Finance Minister Ranjith Siyambalapitiya said.

Based on a loan from the Asian Development Bank, the new scheme has an allocation of Rs.50 billion, launched with the view of strengthening small and medium enterprises, he said. 

The Minister made these comments while addressing a media briefing held at the Presidential Media Centre. 

Under this scheme, small and medium enterprises can receive loans up to a maximum of Rs.10 million. 

Additionally, Rs.6 billion will be allocated for the development of small tea gardens, and Rs.2 billion will be designated for women entrepreneurs, the Minister said. 

The Minister revealed these details, commenting on the positive steps taken by the Government in its economic recovery efforts. 

In March this year, the ADB approved a $100 million loan to provide SMEs in Sri Lanka more access to finance and build their resilience to external shocks, such as the economic crisis and climate change. (Newswire)

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The government hopes to commence vehicle imports from August under a special program that will not cause any issues to the country, State Minister of Finance Ranjith Siyambalapitiya said.

Addressing the Parliament today, State Minister Siyambalapitiya said the International Monetary Fund (IMF) has also been notified regarding the import of vehicles.

The IMF has been informed that after August vehicle imports will be commenced in a certain order.

It has been proposed that the imports be allowed for public transport services, alternatives used for other transport services, normal vehicles, and then luxury vehicles, the State Minister said.

He further said that the committee appointed in this regard convened on July 04 and is expected to submit their report to the Cabinet within a month or by the second week of August.

State Minister Siyambalapitiya said, accordingly, the government hopes there will be some special arrangement to restart vehicle imports without any problem.

He added that the government is looking forward to opening vehicle imports in a very appropriate way so that normal people can also import vehicles. (Newswire)

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The government has chosen to tax fourteen (14) sectors which were previously untaxed, State Minister of Finance Ranjith Siyambalapitiya announced. 

The State Minister said that large-scale tuition classes, private schools, private medical services, engineering services, and surveying services are among the chosen sectors.  

He further said that the Inland Revenue Department has commenced investigating the income of the companies registered under the said sectors.

State Minister Siyambalapitiya said that no one will be allowed to evade tax payments and that the mentioned 14 sectors must register for tax payments.

State Minister Ranjith Siyambalapitiya made the remarks while speaking to reporters in Kegalle. (Newswire)

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Over 44,000 vehicles have been released to the local market despite the existing ban on vehicle imports, State Minister of Finance Ranjith Siyambalapitiya revealed. 

The State Minister said that among the 44,430 vehicles that were released, 38,144 are motorcycles and 6,286 are cars.

He further said that the vehicles had been released to the local market during the period when import restrictions were imposed in Sri Lanka. 

The State Minister of Finance disclosed the information during a discussion held with a group of local vehicle manufacturers at the Ministry of Finance recently.

During the meeting, an in-depth discussion had also been held on granting permission for vehicle imports. 

Representatives of domestic vehicle manufacturing companies pointed out that while removing import restrictions, the government should also focus on the local vehicle assembly businesses. (Newswire)

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Sri Lanka Customs has been instructed to conduct auctions via the online system from July this year.

State Minister of Finance Ranjith Siyambalapitiya said instructions have been given to the Director General of Customs to implement online auctions from July 25, 2024.

State Minister Siyambalapitiya made the remarks in Parliament yesterday while responding to a newspaper report on the matter.

Stating that online auctioning could not be implemented so far due to various practical difficulties, he said the Customs Department has now taken responsibility for conducting all the auctions of Sri Lanka Customs online.

State Minister Siyambalapitiya added that through this new system, the government will be able to obtain a proper income, as well as provide the people with an open right to get goods, including gold, at a competitive price. (Newswire)

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The Ministry of Finance is to confiscate 112 vehicles that had been illegally imported to Sri Lanka in the last few years, State Minister of Finance Ranjith Siyambalapitiya said. 

According to a Finance Ministry statement, the State Minister was quoted as saying that 112 vehicles had been illegally imported for Rs. 7 billion from 2015-2022.

State Minister Siyambalapitiya further said the illegally imported vehicles have been identified by the Fraud and Corruption Investigation Commission.

He said that measures will be taken to confiscate the illegally imported vehicles from the people who are currently using them.

The State Minister of Finance added that it was the responsibility of the buyer to ensure that the vehicles had been imported through legal means. (Newswire)

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The ban imposed on the importation of vehicles will continue to be relaxed in phases going forward, State Minister of Finance Ranjith Siyambalapitiya said.

Speaking to reporters, State Minister Siyambalapitiya said the government has recently taken to relaxing the vehicle import ban in phases based on the requirements of various sectors. 

“We recently allowed the imports of buses and vans for the tourism sector. The vehicle import ban will continue to be relaxed in phases based on such requirements,” he assured.

The State Minister further pointed out that the programme introduced by President Ranil Wickremesinghe as the Minister of Finance since 2022 to date has seen great progress for the nation.

State Minister Siyambalapitiya emphasized that the year 2025 will also reap such benefits if the President’s current programme is continued without hindrance. (Newswire)

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Sri Lanka’s ban on vehicle imports has been relaxed to allow one-year-old vehicles to be imported for tourism purposes, as approved by the Cabinet, State Minister of Finance Ranjith Siyambalapitiya said. 

Speaking to reporters, State Minister Siyambalapitiya said the vehicle import ban, which was imposed during the economic crisis, was relaxed in phases to meet special requirements.

He further said that the import ban was recently relaxed for vehicle imports for the Health Sector and has now received Cabinet approval to be relaxed for tourism purposes. 

“It is considered a custom within the tourist industry that vehicles engaged in the tourism industry for transportation of tourists would not be used for more than 06 years and it is apparent that the condition of the vehicles used in the tourism industry for transportation in Sri Lanka is not satisfactory and sufficient. Therefore, the requirement of importing vehicles essential for enhancing the industry was recognized considering the contribution to the tourist industry within the economic revival process of Sri Lanka,” he said.

State Minister Siyambalapitiya said that taking into consideration these facts, Cabinet approval was granted to import 750 vans with a seating capacity of 6-15 (electric and hybrid) and 250 buses with a seating capacity of 16-30 for small buses and larger buses with a seating capacity of 30- 45. 

He added that these vehicle imports will be permitted without any special tax relief and are subjected to the usual tax payments. (NewsWire)

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The government has decided to provide the proposed Rs. 10,000 salary increment for state employees in April this year.

State Minister of Finance Ranjith Siyambalapitiya said steps are being taken to credit the increased salary before the 10th of April.

Speaking to the media, the State Minister said that initially, the government paid Rs. 5000 as part of the proposed salary hike. 

He further said that however, the government will now pay the entire amount of Rs. 10,000 by including it in the April remuneration. 

State Minister Siyambalapitiya added that they hope to provide the increased salary and pensions before April 10. (NewsWire)

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The proposal to incorporate the National Identity Card (NIC) when issuing the Tax Identification Number (TIN) for tax registration will be submitted to the Cabinet of Ministers, it was reported.

According to News1st, State Minister of Finance Ranjith SIyambalapitiya said that the proposal in this regard will be submitted to the Cabinet next week. 

He further said that it will be proposed to use the NIC number as the TIN when issuing NICs to individuals above 18 years of age. 

The State Minister of Finance revealed that recommendations concerning the proposal had been called from six institutions and four institutions have so far submitted their recommendations. (NewsWire)

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No decision has been taken concerning the restrictions imposed on vehicle imports in Sri Lanka, State Minister of Finance Ranjith Siyambalapitiya informed Parliament on Tuesday (Feb 20). 

The State Minister of Finance said an import ban was imposed on nearly 2000 items due to the economic crisis, which helped revive Sri Lanka’s Foreign Exchange (Forex). 

He further stated that even though restrictions on the imports of certain items have been relaxed, the ban imposed on vehicle imports remains unchanged. 

State Minister Siyambalapitiya also revealed that a special committee is studying the current situation regarding vehicle imports, vehicle demand, fuel cost, and dollar reserves.

The committee is focussing on facts related to future vehicle imports, especially urgently required vehicles, and the current demand, he said. 

The State Minister of Finance also gave a clarification on the 29 vehicles that were recently permitted to be imported.

He revealed that 21 double cabs were imported for the Ministry of Health, 3 buses for the Education Ministry, one vehicle for the Labour Ministry, and three ramps for SriLankan Airlines. 

Out of the 29 vehicles that were imported, 26 were for projects dealing with foreign investments and were imported only after receiving foreign aid from the relevant institutions, he added. (NewsWire)

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The Government intends to introduce the proposed Property Tax in 2025, State Minister of Finance Ranjith Siyambalapitiya said. 

Speaking to the media, the State Minister said the Property Tax will be imposed on persons owning a large number of properties.

Stating that a thorough study is being conducted in this regard, the State Minister said that the tax will be introduced in a manner that does not affect the ordinary citizen. 

Through this tax, the local government institutions will be strengthened and the common people will benefit from it, he added. 

The State Minister of Finance further said the Government has no plans to introduce new taxes which will result in the cost of essential items going up. (NewsWire)

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The Ministry of Finance has taken measures to simplify the newly introduced Taxpayer Identification Number (TIN).

State Minister of Finance Ranjith Siyambalapitiya said steps are being taken to convert an individual’s National Identity Card (NIC) number into the particular person’s Taxpayer Identification Number.

Earlier this month, the State Minister announced that preparations are underway to commence the implementation of the Tax Identification Number from February 01, 2024.

The government has clarified that a Tax Identification Number does not automatically make someone liable for income tax.

The obligation arises only when income exceeds the annual tax exemption limit of Rs. 1.2 million for those above 18, it added.

The government further said that submitting the TIN is mandatory when opening a current account, requesting building plan approval, registering a motor vehicle, renewing a license, and registering title to land from 01st February. (NewsWire)

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The laws will be strictly enforced to eradicate the trade mafia generating profits without registering with the Inland Revenue Department, State Minister of Finance, Ranjith Siambalapitiya warned. 

State Minister Siyambalapitiya further outlined the government’s plan to expand the tax base, anticipating a rise in the direct tax percentage to 40%.

He made the observations while participating in a special VAT awareness conference at the Ministry of Finance yesterday, organized by Saman Ratnapriya, the Director General of Presidential Trade Unions, for the benefit of civil society activists, government officials, political activists, trade union leaders, and journalists.

State Minister Ranjith Siyambalapitiya further said these challenging times affect everyone, regardless of their economic status, as incomes decrease and expenses rise. 

The government acknowledges these difficulties and recognizes the necessity of its ongoing program to address the country’s problems.

Increasing government revenue is crucial for economic development, and to achieve this, the government aims to expand the tax base. The direct tax percentage has already risen from 20% to 30%, with plans to further increase it to 40%. The government also enforces strict laws to combat the trade mafia, preventing them from making unfair profits through fake bills without proper registration with the Inland Revenue Department. Additionally, there is potential to reduce indirect taxes in the future, he said.

Also addressing the conference, Tax Consultant of the Finance Ministry’s Finance Department Tanuja Perera said businesses are required to remit VAT to the Inland Revenue Department monthly, with the amount charged from the 1st to the 31st of January due by the 20th of February. 

“Failure to do so may result in legal action under the VAT Act by the Ministry of Finance. Displaying the Inland Revenue Department’s issued license is mandatory for shops eligible to charge VAT. Invoices, following a format set by the Commissioner General of Inland Revenue, must be issued to consumers after VAT is applied. Strict enforcement is in place against fraudulent businesses collecting money without proper VAT registration, with penalties and collected VAT funds pursued by the government, Perera added.

Meanwhile, Director General of Trade Unions to the President, Saman Ratnapriya, said the VAT amendment has sparked heated discussions in today’s society, particularly since President Ranil Wickremesinghe introduced it in the 2024 budget in his capacity as the Finance Minister. 

“This budget serves as the economic blueprint for the current year, and without meaningful societal discussions, turning its proposals into reality becomes challenging. That’s why seminars on VAT are organized.

“Numerous misconceptions surround this VAT amendment, notably the increase from 15% to 18%. While the tax has risen by 3% for existing goods, some items have gone from 0% to 18%. Additionally, due to tax adjustments, certain products experience a lower-than-expected VAT increase of 18%. To navigate these complexities, a thorough societal discourse on this VAT amendment is crucial,” he said. 

Also speaking at the conference, K. K. I. Eranda from the government revenue unit of the President’s Office said that government inefficiencies in VAT collection have been identified, impacting the potential contribution to the economy. 

“Proper VAT collection could add 6% to the gross domestic product, but currently, only 2% is realized. Three primary areas of tax leakage have been uncovered: businessmen not remitting collected taxes, irregularities by officials, and losses due to tax exemptions. Addressing these leakages is crucial for stabilizing the economy.

“In the first half of 2019, VAT was at 15%, reduced to 8% in 2020, and maintained for the next three years. However, the economic downturn persisted, indicating that the VAT reduction alone did not stimulate growth. To revitalize the collapsed economy, a VAT increase of 18% is proposed.

“Currently, around thirteen thousand businesses are registered for VAT collection, with the government aiming to increase this number to fifty thousand in the future,” he added. (NewsWire)

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The government is open to reconsidering the list of items to which Value-Added Tax (VAT) will be applied from January next year, State Minister of Finance Ranjith Siyambalapitiya said. 

Addressing the Parliament on Thursday (Dec 07), State Minister Siyambalapitiya said the government is prepared to reassess the inclusion of 97 out of the 138 items.

He further said that the government was open to considering concerns raised by various parties concerning the proposed removal of VAT exemptions.

The State Minister revealed that the government expects to generate an income of Rs.378 billion through the revision of the list of goods exempt from VAT.

He made the remarks while addressing concerns raised on the decision to incorporate local food production into the VAT system.

The government has increased the VAT rate by 3 per cent to 18 per cent with effect from January 1, 2024.

It has also been proposed to remove VAT exemptions except from education, healthcare and certain essential food items. (NewsWire)

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The five liquor production companies whose licences were recently suspended owe tax arrears amounting to Rs. 2,715 million to the government, State Minister of Finance Ranjith Siyambalapitiya informed the Parliament.

Briefing the Parliament yesterday, the State Minister said the total tax default with the three per cent penalty for default stands at Rs. 6,721 million.

Stating that the outstanding taxes cannot be collected by closing these companies, State Minister Siyambalapitiya said they have been given a deadline of December 29 this year to settle their tax arrears.

He further said that the licences of four liquor manufacturing companies have already been suspended due to their failure to pay tax arrears.

However, among the companies, only one company has entered into legal proceedings, so the relevant licence has been extended until November 13, which is the next court date, the State Minister revealed. 

State Minister Siyambalapitiya added that the licences of the five companies will not be extended and legal action will be initiated thereafter.

State Minister of Finance Ranjith Siyambalapitiya made the statements in response to a question raised by Opposition Leader MP Sajith Premadasa. 

Earlier in November, it was reported that the licences of Synergy Distilleries (Pvt) Ltd, Finnland Distilleries Corporation (Pvt) Ltd, Wayamba Distilleries, W M Mendis & Co Ltd and the Randenigala Distilleries Lanka (Pvt) Ltd were suspended. 

Sri Lanka’s Excise Department said at the time that the licences of the five liquor manufacturing companies were suspended after their annual licences had not been renewed due to the failure to pay tax arrears. (NewsWire)

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The government plans to introduce a new property or wealth tax in 2025, State Minister of Finance Ranjith Siyambalapitiya said. 

The State Minister revealed that the new property tax will be formulated in accordance with the recommendations of the International Monetary Fund (IMF).

The IMF is of the view that a property tax that has been proposed will be a key source of additional revenue for the government in the year 2025, he said.

State Minister Siyambalapitiya further said that the proposed new property tax will be introduced following a thorough analysis. 

The new property tax is being introduced with the aim of taxing persons owning a large number of properties.

Through this tax, the local government institutions will be strengthened and the common people will benefit from it, he added. 

State Minister Ranjith Siyambalapitiya made the remarks while addressing the media in Ruwanwella on Sunday (Oct 29). (NewsWire)

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State Minister of Finance Ranjith Siyambalapitiya has inspected two containers consisting of over 11 kilos of beedi leaves that had been imported under the guise of Cilantro (Koththamalli/ Coriander) and taken into the custody of Sri Lanka Customs.

State Minister Siyambalapitiya said that the containers imported from India were found to be holding 11.460 kilos of beedi leaves. 

He further said that although a tax amount of Rs. 70 million should be charged for the containers, a tax of around Rs. 300,000 has been charged due to it being imported as cilantro. 

Stating that the containers had been detected due to the exceptional skills of the customs officials, the State Minister said, however, a well-known professional has been continuously exerting pressure for the release of the containers.

State Minister Ranjith Siyambalapitiya said that steps will be taken to conduct an investigation via the Bribery Commission into the matter. 

He further assured that the safety of the customs officers who work with exceptional commitment to increase the country’s income will be ensured as much as possible. (NewsWire)

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The government has decided to lift all import restrictions, except those imposed on vehicles, State Minister of Finance, Ranjith Siyambalapitiya announced today. 

State Minister Siyambalapitiya said that all import restrictions, except those imposed on vehicles, have been lifted with effect from today, October 09, 2023. 

The government imposed a ban on several items as a part of its prolonged stringent import restrictions from March 2020 due to the coronavirus pandemic.

The ban on imports continued due to the economic crisis until November last year after which the government took measures to relax import restrictions on several items in batches.

Despite import restrictions having been eased on several items, the ban imposed on vehicle imports has continued. (NewsWire)

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Inflation in Sri Lanka has significantly decreased to 62.1% over the past year, thanks to President Ranil Wickremesinghe’s robust economic reform agenda, Acting Finance Minister Ranjith Siyambalapitiya said. 

Acting Minister Siyambalapitiya highlighted that inflation, which stood at 66.7% during the first and second quarters of 2022, has now plummeted to just 4.6% for the same period in 2023.

According to the President’s Media Division (PMD), he made this announcement during a press conference held at the Presidential Media Center on Thursday (Sep 21).

Acting Minister Siyambalapitiya further said that over the past year, the government successfully increased the country’s foreign reserves from 1.8 billion dollars to 3.8 billion dollars. 

“In August 2022, the exchange rate stood at Rs. 361 per dollar, but by August 2023, one dollar could be acquired for Rs. 321. This shift is not the result of artificial control but rather a reflection of the rupee’s value adjusting in response to supply and demand for the dollar, which holds significant economic importance.

“The interest rate for deposits, previously at 14% in 2022, has been lowered to 11%, while the loan interest rate, previously at 15.5%, has been reduced to 12% this year. Notably, last year, the primary account deficit was Rs. -247 billion, but this year it has turned into a surplus of Rs. 27 billion. This marks the first surplus in the primary account balance in over 40 years,” he said.

The Acting Finance Minister revealed that tourist arrivals, which numbered 496,430 in 2022, have surged to 904,318 during the first two quarters of this year. 

“Equally impressive is the growth in tourism earnings, which rose from 832.6 million US dollars in 2022 to 1,304.5 million US dollars in the first two quarters of this year, reflecting a remarkable 56.7% increase compared to the previous year.

In the past year, the amount of money remitted by Sri Lankans living abroad to Sri Lanka has surged from 2,214.8 million US dollars to 3,862.7 million US dollars this year, marking a remarkable 74.4% increase according to data from the Ministry of Finance.

“On August 1, 2022, the QR code system was introduced as a measure to manage petroleum demand due to foreign exchange shortages. This led to a significant disparity between normal demand and supply, resulting in a notable increase in diesel consumption by 28% and petrol consumption by 83% in June 2023, when the QR system was partially relaxed. However, as of September 1, the QR code system, which directly impacts economic growth, has been completely lifted,” he said.

Pointing out that upon assuming office, President Ranil Wickremesinghe faced a daunting challenge of addressing a 14-hour power outage, which had a direct impact on the economy, he said presently, the government ensures a continuous and stable electricity supply to the population.

“As of August 23, 2023, there were 1467 imported goods banned due to foreign exchange shortages. Currently, the ban applies to only 279 items. Furthermore, the import of vehicles, which had been halted in 2020, now includes buses and trucks for public transport.

“In April 2022, the country faced difficulties in meeting its debt obligations. However, the government has since secured the first installment under the International Monetary Fund’s Extended Credit Scheme, contributing to stabilizing the country’s economy compared to the previous year,” he added. (NewsWire)

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