Faiszer Musthapha hails new legislation to boost revenue

Following is the text of Investment Promotion Deputy Minister Faiszer Musthapha’s speech in Parliament last week when four bills dealing with State revenue came up for debate and vote

Hon. Speaker, I am privileged to speak when four bills dealing with the revenue mechanism of our country is being debated. As you know, these bills primarily deal with increasing the revenue chargeable on the said documents. Some of these laws deal with the revenue as at year 1902; for example, the Bill to amend the Power of Attorney Ordinance (chapter 122).

Now Mr. Speaker, I will give you some examples. Let us take the Powers of Attorney amendment Bill. It was three rupees and 75 cents for the registration of power of attorney. The documents itself would have cost much more. On any cancellation or revocation of Power of Attorney the state coffers receive only one rupee. Since 1 July 1902 the State revenue had been in this manner.

Then consider the Registration of Documents. For any caveat registration for a period of two years, the fee charged was Rs. 12.50 as per Law No. 19 of 1976. An application for copies of extracts of any deed was only 2.50. That was also by an amendment brought in 1976. Likewise it has been 2.50 for folio extracts. Now Mr. Speaker you will see that the revenue structure is archaic and not realistic.

We have been stagnating for centuries without updating the Government revenue machinery in several spheres. These are the ills of the past. Unfortunately our past leaders lacked the vision and the initiative in the interest of the people of our country.

Here it is pertinent to say President Mahinda Rajapaksa is thinking in terms of the future. In this regard I wish to quote a statement of the President as reported in yesterday’s Daily News: “We should think of a development that would take place in 20 to 30 years and the people are being empowered to face this development challenges in the future.”

Therefore, the vision of President Mahinda Rajapaksa is to do development which would pay dividends even after 20-30 years. So he is one of the most visionary leaders of our time. This reminds me of how some of leaders had acted in the past without thinking afar, which had been detrimental to the interest of the country.

I can cite a very good example. In 2001 the UNP Government repealed the Finance Act No. 11 of 1963 permitting the sale of land to foreigners without paying any tax. Then see what happened. In Galle almost entire prime land fell into the hands of foreigners and today Galle is like a fortified foreign state. Value of land in this area is around five million a perch. This has prevented Sirisena, Banda, Mohamed, and Raja buying land in this area. A good part of our coastal belt is also owned by foreigners.

President Rajapksa wants the fruits of the soil of our motherland to be reaped by our own citizens and through the Budget proposals of 2013 the President proposed to prohibit the sale of land to foreigners.

Look around to neighbouring countries, especially the emerging economies. Bangladesh prohibits foreign companies buying land. Cambodia prohibits foreign national owning more that 40% of shares in companies that buy land. In India foreign companies cannot lease land for more than five years without permission of the Reserve Bank of India. Lease contracts are for a maximum duration of 99 years.

In Myanmar foreign companies cannot purchase or own land. May lease land for a term up to 50 years. In Vietnam, cannot buy land. May lease land from the industrial zone for a maximum period of 70 years In Philippines the Constitution prohibits foreign companies from buying land.

We are a proud nation. I must say we entice the foreigners to come and invest here but at the same time we also safeguard the interest of our citizens and our country. Nobody can say by doing so we had failed to bring in foreign investment.

As the Deputy Minister of Investment Promotion, I like to emphasise on the fact that out of the total Foreign Direct Investments the country had since the establishment of the BOI, 67% had been during the period of President Mahinda Rajapaksa.

This Government had the strength and the courage to overcome all this and work for the betterment of Sri Lanka. If we look back at the economic progress since 2005, it will be seen that our economy has been very steady and growing.

I like to quote some facts highlighted by the Governor of the Central Bank yesterday (8 April 2013) while presenting the CBSL Annual Report for 2012 to the President. Inflation has now dropped to a single digit. What I would like to highlight is that we have continuously maintained inflation on a single digit for the last 50 months. Unemployment has dropped to 4%. Infrastructure development since the defeat of terrorism is amazing.

Per capita income was US$ 2,836 in 2011 and in 2012 it has increased to US$ 2,923. If you take this in rupee terms, in 2011 per capita income was 313,506 and in 2012 it has increased to 373,001. The growth rate has increased as never experienced in the history of the country.

Mr. Speaker, we have achieved these milestones despite challenges that we have to face from many quarters within and beyond the shores of this country. Some of the challenges have had drastic impacts on our economy. The embargo imposed on Iran did affect us in a big way. We had to incur extra expenditure on oil imports.

When you compare Sri Lanka with other countries in the region, anybody can see that our economy had been very resilient. We know that so-called developed countries are in crisis. In some countries the banking sector has collapsed. But our banking sector is expanding. That indicates how resilient we are.

So Mr. Speaker, this economic progress has to continue and these revenue proposals are only a part of that process. Therefore, the duty of all of us here is to support these Bills and contribute to the country’s progress of which a future generation would become the largest beneficiaries.

Thank you.