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By Ashwin Hemmathagama
– Our Lobby Correspondent
Moving a resolution under Section 3 of the Active Liability Management Act No. 8 of 2018, Minister of Finance Mangala Samaraweera sought that Parliament resolve to raise a sum not exceeding Rs. 480 billion, to be raised by way of loans in or outside Sri Lanka for debt servicing purposes.
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Minister of Finance
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Moving the Motion, Minister held that the borrowings will be made within the stipulated limits. “By the end of 2018, the outstanding debt of the central Government amounted to Rs. 11, 276 billion, which is 78% of the GDP. It contained Rs. 5,531 million domestic loans amounting to 49% and Rs. 5,475 million foreign denominated debt. In servicing these debts, funds will be raised accordingly within the given borrowing limit,” he explained.
The Minister touching upon the controversy of importing Chinese cigarettes, held that it is an essential move to curtail smuggling that forces the Government to lose revenue. “During Budget 2019, I held that we will have to import foreign cigarettes. Now you find foreign cigarettes despite the Government ban. Any global cigarette brand is here to buy. Chinese workers prefer their own brands and have started to import illegally. The Chinese Ambassador highlighted with me the necessity of allowing Chinese cigarettes to avoid smuggling,” he explained.
“So, I had to approve bringing Chinese cigarettes to get an income to the Government. The public money is spent from birth to death. So, we need to find ways if increasing Government income to continue providing these free services. There are professionals who evade taxes. We need to tax them and reduce the indirect tax. If this continues, we should be able to reduce the VAT by 2020,” he added.
The Active Liability Management Act No.8 of 2018 that was enacted in March last year ensures that the financial needs and payment obligations of the Government are met at the lowest possible cost over the medium to long-term consistent with a prudent degree of risk.
As per the provision of the Bill, the Parliament may, from time to time, by resolution, approve to raise a sum of money during a particular financial year which will not exceed 10% of the total outstanding debt as at the end of the preceding financial year, as a loan whether in or outside Sri Lanka, in terms of the relevant laws for money to be raised including the provisions of the Monetary Law Act (Chapter 422), the Local Treasury Bills Ordinance (Chapter 417), Registered Stocks and Securities Ordinance (Chapter 420), or the Foreign Loans Act, No. 29 of 1957, for and on behalf of the Government for the purposes of refinancing and pre-financing of public debts of the Government.
