Ravi K clarifies controversial taxes in moving amendment to Appropriation Act

Friday, 6 February 2015 00:41 - - {{hitsCtrl.values.hits}}

By Ashwin Hemmathagama Our Lobby Correspondent Minister of Finance Ravi Karunanayake yesterday in Parliament moved an amendment to the Appropriation Act, No. 41 of 2014 as well as explaining some of the Budget’s controversial taxes. Moving the second reading adjourned debate, Karunanayake said: “Our Budget was prepared to curtail unnecessary costs. We were successful in addressing the needs of 99% of the public. What we achieved within 21 days you failed to do after being in power for 11 years. Believe me, the economy is in a crisis which is reparable.” “You (Opposition) took Greece as an example. All contingent liabilities stand at Rs. 923,000 lakhs. Will you be responsible for it? We only took off the unnecessary capital expenditure from what was proposed in the previous Budget,” he added. Speaking about the controversial Mansion Tax, Hybrid Vehicle Tax, and Super Gain Tax, the Minister said: “The Mansion Tax was aimed at those who made money from corruption. But those who have large houses for long periods will not be liable to pay. There is a depreciation consideration also. We are targeting 1,000-1,500 mansions for this tax, which will raise Rs. 1,000 billion. “Secondly, the Vehicle Tax was reduced by 15% to make vehicles less than 1,000 cc affordable to all. Electric cars by 5%. A tax of 40% was introduced to avoid a mismatch between hybrids and diesel or petrol driven vehicles,” the Minister said. “Super Gain Tax is to recover revenue from those who use national resources and make money without any tax payments. CSN is the best example. I need not remind you about its ownership. CSN has avoided paying the Spectrum Tax for the last six years. The electricity bill is outstanding. Presidential Security provided the vehicles,” Minister Karunanayake charged. In response, the Leader of the Opposition Nimal Siripala de Silva pledged support for all the benefits proposed in the recent Appropriation Bill for public betterment. “Ravi used to respond on the budgets and the economy during his days in the Opposition. Now he has the chance to act. Taking this Budget in summary, we have no objection to giving benefits to the public. We too will be a part of it by passing it in this House. Without our support you will not be able to pass it. Such agreement was the result of the discussion we had with President Maithripala Sirisena. You made this Budget by making minor changes to what we presented,” he said.

Bourse rebounds on bargain hunting; Rs. 968 m net foreign buying

The Colombo stock market saw a welcome rebound yesterday after a sharp dip during previous sessions thanks to the return of bargain hunters and net foreign buying. The market’s value rose by Rs. 21 billion reducing the Rs. 168 billion lost since the new Government’s Interim Budget. “Colombo equities gained ground after two days of freefall as bargain seekers turned bullish on selected stocks. Foreign investors drove the turnover to three-week high today led by purchases in premier blue-chip John Keells Holdings,” Lanka Securities said. All share price index gained 47.25 points (+0.67%) and S&P SL 20 index by 28.67 points (+0.75%) mainly fuelled by counters such as Dialog Axiata (up +7.1%), HNB (up +3.1%) and Access engineering (up +4.7%). After three days of decline JKH was up 1.3% to Rs. 203 yesterday though it touched an intra-day high of Rs. 205. Daily market turnover reached Rs. 2.4 billion, the highest since 12 January 2015. JKH positioned at the top of the turnover list for the second consecutive day with Rs. 1.5bn, and contributed 65% of the market turnover. JKH saw a volume of 7.1 million which changed hands in more than 1000 trades. Lanka Securities said gainers offset the losers 129 to 61 while 39 counters remained unchanged. Cash map improved to 53% from 28%. Foreign investors were net buyers with net inflow of Rs. 968mn. Foreign participation for the day was 56%. Net foreign inflows were seen in John Keells Holdings (Rs. 823 million), People’s Leasing (Rs. 89 million) and Dialog Axiata (Rs. 50 million). With yesterday’s inflows the year -to-date net foreign buying rose to Rs. 908 million.