Friday, 6 February 2015 00:00
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Independence from crime
I cannot think of anyone more appropriate for the job.
The criminal diaspora is all pervasive in every urban locality and village in this country. Crime with violence has become a profession.
Legislation alone will be sadly inadequate given that this criminal element has no other means of livelihood and embarks on such activity knowing the chances of getting caught are remote due to inefficiency or collusion with law enforcement and the political establishment.
All the justice and law in the world cannot help the innocent victims after the crime is committed.
Peace and anti-crime legislation on paper are of little use unless every citizen in this country is free to go to and spend time in any nook and cranny of this country at any time of day or night without fear of being robbed, kidnapped for ransom or killed by thugs to eliminate a possible witness.
This Government won the election solely on the law and order and racism issues.
These are by far the biggest issues in the country today.
The author does not envy you your task, but can only hope and pray you can make this a decent country to live in again before all respectable people leave the country in disgust.
T. E., Kotte
Importance of receipts
Several concessions are granted in the Budget proposals 2015.
VAT has been reduced from 12% to 11%.
Turnover limit for VAT increased from 12 m to 15 m per annum
Turnover limit for NBT increased from Rs. 3 m to 3.75 m per quarter
However, several traders including services providers do not issue receipts. Other retailers, small restaurants, meals on wheels, tuition centres, dance, music teachers, doctors, lawyers, etc., are clear examples. Private bus operators do not adhere to the statutory requirement of issuing receipts.
By this, income is suppressed and taxes are not collected. Further, traders deny responsibility for selling outdated, overpriced and damaged goods. Receipt is a valid proof of payment. Therefore issue of receipts should be made compulsory. Cash registers should be installed at all trade centres.
This requirement must be strictly adhered to and officers (flying squads) should be appointed to follow up implementation. Customers should be in a position to complain by telephone in the event of violation.
S.R. Balachandran BSc. FCA, FCMA (Sri Lanka)
Good governance should apply to public limited companies as well
In Sri Lanka there are many public companies which are not listed where the control is exercised by few individuals/families. The minority shareholders very often are neglected and even their rights are not recognised.
Those in control operate the companies as if they are sole owners and besides paying themselves salaries which they cannot command outside their own enterprises also charge all their personal expenses to the company accounts.
Many of these companies very often run at a loss and no payment of dividend is there for possible. These companies resort to large scale borrowing from banks and the funds so obtained are not deployed in the interest of the companies.
The banks also encourage lending as they have to keep up to their budget. More often than not these borrowings end up as none performing loans. The banks in their composition of lending rates factors for such risks. Thereby increasing the lending rates to the general public which has a retarding effect on growth in the country and competitiveness for businesses. Such lending can also have a serious effect to the banking system.
The solution lies in controlling the governance of such companies. The provisions in the Companies Act spelling out right to minority shareholders has not resulted and have not been effective in controlling the acts of the directors of such companies.
The auditors only express an opinion on the financial statements and take position that their mandate is for expression of opinion on the financial position of the company and not on governance issues. Bad governance therefore has repercussions on banks, loss of tax revenue, risk of closure of business and its impact of employees and finally the minority shareholders.
The role of the Registrar of Companies is very limited. In these aspects and the minority shareholders cannot enforce some of the provisions in the Companies Act as they entail large legal and other cost.
Now that the new Government is addressing issues of the past with a view to bring good governance, the minister in charge of this subject should address the matters highlighted. A special unit setup under the Registrar of Companies for a special audit on a random basis selection of companies setting out specific term of reference may serve as a moral check and may mitigate bad governance process. Stephan IgnatiusMoratuwa
