April 21, 2019

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    " Empowering the People and Nurturing the Poor”

    March 06, 2019

    Clean, Green and a Sustainable Environment

    165. Conservation and Protection will only be effective if society is an active part of this endeavor. As such, community-based “Green Clubs” will be established in every Divisional Secretariat, consisting of volunteers, especially students. These Clubs will be engaged, especially to expedite the planting of 2.5 million trees, cleaning beaches, separation of waste, etc.

    Proposed Rs.450 Mn

    166. We will continue investments in creating “Green & Clean” Public Spaces such as, “Haritha Udyana” (eco-friendly parks), which will enable the greening of our cities and villages, whilst facilitating stronger bonds in communities. We will partner the Colombo Municipal Council in its ‘City Beautification’ endeavor. Rs.1000Mn. has already been allocated.

    167. Further, the “Nilwala Eliya” Model Park and Mega Zone will also be completed in 2019.Rs.1,000Mn has already been allocated.

    168. Mangroves are eco-systems that stabilize coastlines, provide critical habitats for many animals and sequester more carbon-dioxide than other kinds of forests, making them indispensable in combating climate change. However, our mangroves are fast receding and as such, we will support the replanting of mangroves, where nurseries will be established at the first stage.

    Proposed Rs.50 Mn

    169. Rs.2,000Mn will be channeled to facilitate the rehabilitation of houses and other infrastructure facilities affected by disasters, while also introducing disaster resilient houses in selected high-risk districts.

    170. Mr. Speaker, in the recent past, we have experienced the impact of droughts and floods resulting in the loss of lives, loss of income and property. The victims of such disasters, both individuals and corporate, will have to be compensated immediately and to mitigate the impact of the loss and to facilitate a more efficient and effective method of doing so, we will allocate Rs.20,000 Mn. over the medium-term as a Disaster Management Contingency Fund.

    171. Sri Lanka has been categorized by the NFORM Global Risk Index as a high-risk country, prone to natural disasters. In the past few years we have seen that, while one part of the country was faced with severe droughts, other parts of the country experienced heavy floods, during the same period of the year.

    Hence, it has become a timely need to take proactive measures to allocate resources to mitigate both the vulnerability of natural disasters and to compensate the affected people and properties.

    Therefore, it is required to strengthen the natural disaster insurance scheme that the Government introduced in 2016, by allocating an additional Rs.1,000 Mn. from this year, to increase the Annual Government Premium from Rs.500 Mn. to Rs.1,500 Mn.

    172. The Ministry of Women, Child Affairs and Dry Zone Development will be allocated Rs.250Mn to enhance initiatives to develop the dry zones, in addition to the “Gamperaliya” and other development initiatives, already in place and proposed.

    173. The proliferation of single use plastic products, including plastic bags, packaging, plastic bottles, lunch sheets, have led to significant environmental costs.

    As a first step in introducing appropriate regulation for this sector, it will be mandatory for any entity, manufacturing or importing single use plastics (as defined by the Central Environment Authority) to register with the Ministry of Industry and Commerce before the 1st of September 2019.

    174. Sri Lanka will develop a consolidated plan for Marine Conservation to protect and sustainably manage its marine resources. We will progress towards declaring the Exclusive Economic Zone of Sri Lanka as a Marine Conservation Area, entailing measures to sustainably manage marine biodiversity, to enhance socio-economic benefits to the country.

    Religion, Arts and Culture

    175. We recognize the unique contribution of artists, writers and musicians, towards enriching our society and enhancing Sri Lanka’s cultural value.

    Thus, our Government has continually supported the development of culture and arts in Sri Lanka. We will also introduce and implement a fair scheme of royalty payments for our artists, so that they continue to benefit from their creations, when such creations are aired/telecast or otherwise publicized. This will protect their creations and provide them with a continuous income source. To further support this initiative, we have made royalty income up to Rs.50,000/per month, exempt from withholding tax.

    176. Mr. Speaker, we have undertaken the Rehabilitation of Buddhist Temples and other religious places of worship, under the “Gamperaliya” Scheme and for the year 2019, we have increased the allocation to Rs.1Mn from Rs.500,000/- per place of worship.[Expl Note III(a)- 10]

    177. Solar Power will also be provided under “Gamperaliya” for places of worship to further mitigate their energy costs and relieve the burden on our national electricity grid. [Expl Note III(a) -11]

    178. The infrastructure facilities at the Madhu Church will also be improved.Rs.200Mn has been provided for this purpose.

    179. The renovation work at the John De Silva Theatre will be completed by 2020, with the installation of ‘State of the Art’ equipment.

    Proposed Rs.700 Mn

    180. The National Art Gallery will be modernized and a new wing for Modern Art will be established.

    181. Work on the world-class Performance Centre in Moratuwa will commence in 2019.

    Reconciliation through Economic Empowerment

    182. Mr. Speaker, last year we initiated a multi-pronged strategy to address the key issues faced, in particular, by our people in the North and the East. Our strategy was driven by the objective of creating sustainable livelihoods, including assisting those heavily indebted and assisting the marginalized. This will also be complemented by the Government’s commitment to ensuring a framework, where there is justice for all stakeholders, ensuring that the violence of the past will not recur again. We have just launched the Economic Development Framework for the

    Northern Province, along with stakeholders and the Central Bank of Sri Lanka (CBSL). Steps are now being taken to convert this into a concrete work plan, which will benefit all the citizens in the North. We will extend this framework to other similarly affected districts in the country. Office of National Unity & Reconciliation (ONUR) will be requested to participate in this national effort.

    183. Communicating our reconciliation efforts in a stronger and more meaningful manner is critical for sustainability of all our endeavors in this area. Towards this end, I propose to allocate Rs.200Mn to the Secretariat for Coordinating Reconciliation Mechanisms (SCRM), which comes under the Hon Prime Minister’s Office, for Communication and Awareness programs in this regard.

    184. The Office for Reparations Bill was passed by this House and work will begin in 2019. We will provide the required resources for the office to be set and staffed adequately.

    Proposed Rs.700 Mn

    185. The Office of the Missing Persons (OMP) will be adequately resourced to support families of all missing persons island-wide, including the MIA’s of the Armed forces and the Police, who have obtained Certificates of Absence. They will be provided Rs.6,000/-per month, until the Office of Reparation is established and their cases are resolved. These families will also be given preferential access to relevant “Enterprise Sri Lanka” Loan Schemes and will be required to join the livelihood programs coordinated by (ONUR).

    186. Mr. Speaker, to fast track development in the North and the East, we will establish the “Palmyrah Fund”, with an investment of Rs.5,000 Mn spread over 2 years. We invite well-wishers, philanthropists, especially in the Diaspora, to also contribute to this Fund, which will be administered by the Treasury. The funds will be routed through the Government Agents for development activities in the war affected areas. In addition to these development activities, the fund will also channel resources towards programs that addresses alcoholism, drug abuse, youth unemployment, civil society-initiated counseling and support programs.

    187. In 2018, significant investment in producer co-operatives sought to urgently create jobs and decent incomes by initiating 50 small industries in the rural economy. The groundwork laid last year, allows us to scale up this program rapidly with another 50 co-operative small industries and take existing industries to the next stage of development. Tech Ceylon Social Ventures, a non-profit company of mainly young Sri Lankan engineering and technology graduates, have provided voluntary technical services driving our flagship small industries producer co-operatives program in the North. This support has been invaluable for successful Government investment, and I hope young professionals in other regions will also make a similar contribution to our national economy.

    188. The Debt Relief Scheme will be continued through the Cooperative Rural Banks and Thrift and Credit Cooperative Societies.

    Proposed Rs.250 Mn

    189. An Integrated Project to create Industrial Scale production of Toddy Bottling and production of Jaggery will be set up in the Northern Province, in collaboration with relevant Co-operative Societies.

    190. To facilitate more efficient trade links between farmers and the market, 10 Satellite Economic Centres connected to a Central Economic Centre will be established in the Northern Province.

    Proposed Rs.100 Mn

    191. The Giant Tank will be rehabilitated, facilitating Agriculture, especially in Mannar.

    Proposed Rs.300 Mn

    192. Rs.2,000 Mn. has been allocated to provide facilities such as Water, Electricity, etc., for the already built houses and to support for partlybuilt or destroyed houses in the North and the East.

    193. We have provided debt relief to around 45,000 women who are residents of the drought affected districts of Trincomalee, Ampara, Batticaloa, Jaffna,Mulaitivu, Kilinochchi, Vauvuniya, Mannar, Kurunegala, Puttalam, Anuradhapura and Polonnaruwa, who have availed themselves of micro-finance loans, upto a maximum of Rs.100,000 (initial capital) and outstanding for at least 3 consecutive months, since June 2018. This initial step will be followed up with concessionary loans from the “Enterprise Sri Lanka” program and the Cooperative movement, in order that this situation is mitigated in the future.

    Proposed Rs.500 Mn

    194. Our efforts to ensure reconciliation and provide a sustainable livelihood in the Northern Province, will be further strengthened through the work undertaken by ONUR, including “Sahodara Pasal”, “Heal the Past – Build the Future”, “Viruliya Shakthi”a Programme for Military Widows, Programmes for Peace through Arts& Culture and the Integrated Village Development Program. ONUR will be further supported to carry out and enhance these programs and design and implement new ones.

    Proposed Rs.750 Mn

    Revenue

    195. Mr. Speaker, Sri Lanka’s tax-to–GDP ratio fell to one of the lowest in the world and the nation’s tax efficiency ratio is also below that of peer countries. In this context, I propose the following revenue proposals to enhance the fiscal revenue in the year 2019, and also to address certain anomalies in the taxation system.

    196. Revision of Excise duty on Cigarettes effective from 6th March 2019 and introduction of Nation Building Tax on manufacturer of Cigarettes effective from 1st June 2019. Accordingly, Excise duty on Cigarettes, which are more than 60 mm, will be increased by 12%, resulting in an increase of Rs.5 per stick on average. Excise duty on cigarettes will now be based on indexation with a minimum annual duty increase capturing annual inflation and GDP growth. This will ensure revenue protection and control affordability.

    197. Revision of Excise duty and implementation of luxury tax on motor vehicles effective from 6th March 2019. The revision of the excise duty will have a minimal impact on smaller personal vehicles. In addition, the 200% cash margin requirements on motor vehicle imports will be removed in the near future.

    198. Revision of Cess duty on importation of Tendu Leaves (Beedie Leaves) from Rs. 2,500 to Rs. 3,500 per Kg, effective from 6th March 2019.

    199. Revision of Embarkation Fee by USD 10 per person. This increased embarkation fee shall be credited to the Consolidated Fund effective from 1st April 2019.

    200. Introduction of 3.5% of Nation Building Tax in place of existing Stamp duty, on all foreign payments made by using any Credit Cards and Debit Cards. This will be made effective from 1st June 2019. This proposal will also help address taxation of off-shore digital services.

    201. Revision of fee on alteration of passports and issuance of passports effective from 1st April 2019.

    202. Revision of the price of special number plates for motor vehicles, issued by the Department of Motor Traffic, effective from 1st June 2019.

    203. Revision of Excise duty on liquor manufactured locally will be based on indexation, effective from 6th March 2019, where the minimum annual duty increase is according to an index capturing annual inflation and GDP growth.

    Increase of Excise duty on hard liquor manufactured locally by 08% (Excise duty on Special Arrack remains without change) and malt liquor by 12% will be done based on indexation effective from March 06, 2019 where the minimum annual duty increase is according to an index capturing annual inflation and income growth (GDP change).

    204. Piece-based VAT rate on disposal of garments by BOI approved enterprises will be revised from Rs. 75 to Rs. 100 on the basis of inflation indexation, effective from 1st June 2019.

    205. 15% increase of all fees and charges which have not been revised since 2016.

    206. Increase of toll on expressways by Rs.100 during peak hours effective from 1st April 2019.

    207. Increase of license fee of casino's from Rs. 200 mn to Rs. 400 mn per annum and rudjino games to Rs. 1,000,000 per annum. The casino turnover levy will be charged at 15%. These new charges will be effective from 1st April 2019

    208. A casino entrance fee of USD 50 per person, will be charged, effective from 1st June 2019.

    209. Revision of economic service charge (ESC) on selected imported goods.

     

    210. Revision of unit rate based custom import duty on selected goods including fruit drink, liqour and tobacco effective from 6th of March 2019.

    211. Mr. Speaker, the details of the Revenue and Expenditure proposals are described in the technical note.

    212. The relevant amendments to the Borrowing Limit for the 2019 Appropriation Bill for the financial year 2019, is presented in Annexure III. The Revenue Proposals are presented in Annexure I. Further the underlying Fiscal Framework is presented in Annexure IV. Considering the administrative processes that needs to be followed in executing the mandated work, I propose a saving of 10% to 15% from Capital and Goods and Services expenditure.

    The document under the FMR Act No. 03 of 2003, which has to be submitted along with the second reading of the Budget, is also tabled.

    213. Mr. Speaker, I wish to thank H.E. the President and the Hon. Prime Minister for the guidance given. I wish to thank my State Minister - Hon. Eran Wickramaratne for his support. I wish to also thank all those who sent in their Proposals, which guided this Budget. I am grateful to my colleagues at the Cabinet and all Members of Parliament for the support extended. Last but not the least, I wish to thank the Secretary to the Treasury and all the officials who worked hard in preparing this Budget. Mr. Speaker, often times, our Economic Policies have been guided by short termism, which has created uncertainty and chaos in our systems.

    This has prevented the country from reaping the benefits of its true potential. In fact, our people have had a raw deal. We, in this House, has the power to change this and create a new paradigm that will enable the people that we represent to be prosperous.

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