SJB cries foul over SGST bill, resorts to legal action

• Claims SGST bill proposal to collect funds under Ministry violates Constitution 
• Warns rice imports could fix price to benefit Govt. cronies  

By Darshana Abayasingha

SJB MP Kabir Hashim charged that the Special Goods and Services Tax (SGST) bill presented in Parliament by the Finance Minister violates Article 149 of the Constitution, as the fund collected would be pooled into a special account under the Ministry instead of the central Government fund. 

The bill empowers the Finance Minister to determine the rate of the tax, the basis of computing the tax, and exceptions to the tax by an order published in the gazette. A unit established within the Treasury, under a Deputy Secretary to the Treasury, will be responsible for the collection and accounting of the SGST.

“The purpose of the bill as explained was to enhance Government earnings, but considering the manner in which this bill has been drafted, this raises questions if it is designed to enhance the earnings of some ministers instead,” Hashim questioned. 

The Department of Excise, Inland Revenue and the Department of Customs, which collect revenue at present have effective processes in place come under scrutiny of the Auditor General, which do not require to be changed aside broadening the tax base, and ensuring parliamentary supremacy over taxes, he said. The SJB and other groups are challenging the proposed changes in court. 

Joining the briefing, MP Eran Wickramaratne said that due to the numerous scandals that have plagued this Government, “there is a significant lack of trust in the system”, and alluded to concerns that have arisen with respect to the price and import of rice. 

Large-scale paddy millers in the country – who operate as a mafia – have already imported up to 500 metric tonnes of rice from countries like India, and there is a possibility that these would be mixed with domestic produce and sold under local branding, Wickramaratne said. 

“There is lack of trust in the Government due to the many other scandals, and there is concern this could also happen to help their friends rather than genuine consumers and producers as we witnessed with several other essential items.” 

Pointing out that Sri Lankans consumes 2.4 million metric tonnes of rice annually, recent reports of the Government requesting 1 million tonnes of rice from China portrays the true extent of the problem the current Government has created for the people with its ill-conceived chemical fertiliser ban, the SJB MP added. The reports are yet to be confirmed by the Embassy, he noted, but added that imports would drive the price of a kilogram of rice well over Rs. 200 heaping further burden on the public. 

“The Government recently announced Rs. 40 billion in payment as compensation for agricultural losses. It is not clear if this will go to the farmers or consumers as both segments have lost out. This is the outcome of wrong policies; by stopping chemical fertilisers they have created a huge disaster. Who is responsible? Because this is tax payers’ money. 

“Is it the Agriculture Minister or is it the President who is responsible for that decision? In Sri Lanka we don’t hold people responsible. It is one thing to make a mistake and then you could apologise, but if there is consequence to others then justice must prevail,” Wickramaratne noted. 

A fortnight ago, the SJB charged the Government is caught up in a vicious circle of its own lies and the country is going from bad to worse due to its sheer mismanagement, and called on the Government to consider restructuring the country’s debt repayments given its perilous state.