Govt. vigilant on banks and financial institutions reluctant to cut interest rate: Siyambalapitiya

Saturday, 8 July 2023 00:39 - - {{hitsCtrl.values.hits}}

Highlights importance of interest rate cuts to promote economic growth, facilitate financial stability
Plans to submit comprehensive report on broadening tax network to President Ranil Wickramasinghe next week
Says Govt. aims to take measures to prevent tax evasion, ensure fair and effective taxation system

State Finance Minister Ranjith Siyambalapitiya yesterday stressed the Government has heightened its scrutiny of banks and financial institutions that are reluctant to lower interest rates.

He emphasised that commercial banks should align their interest rates with the directives set by the Central Bank, noting that the Government will enforce strict sanctions against entities they are not complying with. Speaking at a ceremony held at the Excise Department Headquarters, Siyambalapitiya highlighted the importance of interest rate cuts to promote economic growth and facilitate financial stability.

“The Central Bank’s investigation into banks and financial institutions not complying with the interest rate cuts signifies the Government’s determination to ensure a conducive lending environment,” he added.

The State Minister also noted that the comprehensive report aimed at expanding the tax network and increasing State revenue would be submitted to President Ranil Wickramasinghe next Wednesday (12). The report, formulated through extensive consultations with revenue-generating institutions, offers various proposals for effective income management without burdening the public with additional taxes.

“By fostering a supportive financial environment and optimising revenue streams, the Government aims to bolster economic growth while minimising the tax burden on the people,” Siyambalapitiya added.

He said the report addresses critical aspects, such as closing loopholes in the tax network and exploring strategies to enhance revenue collection while tackling issues faced by revenue-generating institutions, including employee concerns. The Government’s objective is to optimise revenue streams and create a fair and sustainable tax system.

Responding to the rise in illegal alcohol consumption due to increased prices, State Minister Siyambalapitiya said that alternative approaches to revenue generation had been prioritised instead of further price hikes.

Noting that the intent of the Government is not to impose new taxes in the future, he emphasised the importance of covering around 75% of the tax network’s existing loopholes.

”The Government aims to take all necessary measures to prevent tax evasion and ensure a fair and effective taxation system,” he added.

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