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The Ministry of Finance and Economic Affairs under the 'purported' minister Mahinda Rajapaksa, recently announced a package of tax exemptions for the agriculture sector. However, the announced measures have little or no real impact on the agro sector as most small-scale farmers do not fall into the bracket of income tax payers. 

Data over the last few years showed that revenue collected from all agriculture-based income taxes accounted for approximately 0.03% of total government tax revenue – this is a negligible figure and suggests that the reductions of these taxes will not have a material impact on the agriculture sector and the productivity thereof.

Key issues in the agricultural sector

However, the real requirements with regard to the agricultural sector in Sri Lanka are access to affordable finance, good quality irrigation facilities, state of the art storage and warehousing facilities, and access to foreign/domestic markets.

Through former Finance Minister Mangala Samaraweera’s ambitious ‘Enterprise Sri Lanka’ programme, the ousted government initiated several loans schemes including ‘Ran Aswenna’ (subsidised interest rate of 6.8%) and ‘Govi Navoda’ (subsidised interest rate of 3.4%), that covered the entire agriculture value chain. Before the unconstitutional coup that took place on  October 26, over LKR 9 billion was disbursed under the Ran Aswenna credit scheme that was geared to provide financial assistance for farmers, farmer organizations and agro-processing establishments for upgrading the sector through infusion of productivity enhancing technologies and practices. It also opened avenues for small farmers to transform their businesses from subsistent level to commercial level.

Similarly, under the Govi Navoda loan scheme, over LKR 8 billion was disbursed before the illegal takeover of the government. This was a special loan scheme introduced to improve the mechanization of agriculture. This concessionary loan scheme provided financial assistance for farmers and farmer cooperatives in order to encourage them to mechanize their agriculture activities.
 
Furthermore, through the ‘Gampereliya’ rapid rural infrastructure development programme, the former government initiated the rehabilitation of small irrigation tanks around the country that had been neglected for decades, that left farmers vulnerable to the droughts of the last two years.

They also initiated several major state of the art warehousing projects in Polonnaruwa, Ratnapura, and Killinochchi through the 2018 budget, which has helped stabilise farmer incomes. Through the ‘Agriculture Modernisation Programme’, the former government initiated numerous schemes to connect small scale farmers with larger domestic and global value chains. At a recently held press conference, former finance minister Samaraweera said that all of these programmes were targeted for expansion through the 2019 budget.  
 
The proposed tax breaks of the ‘purported’ government will not address any of these critical issues in agriculture. However, it will benefit the large plantation companies and commercial agricultural players, who could afford to pay taxes. Therefore, in effect, the agriculture relief package provides a tax break for corporates but provides no benefit to the small-scale farmers. These tax breaks are lazy, populist measures that do not address the real underlying issues of the agriculture sector.  
 
The tax exemptions for agriculture will however, raise other questions. What about support for the other small-scale industries? What about small and medium scale businesses engaged in carpentry, retail, manufacturing, construction, and fisheries sectors? Do they not deserve tax relief? Why just agriculture? Perhaps, since it is a sector with a large number of individuals of which only a very few would actually benefit from the proposed tax breaks. The tax package also includes measures to reduce taxes for agricultural processing which will benefit large scale, highly profitable rice millers.  

The Big Four

It also noteworthy that the four biggest rice millers in the country are all affiliated to the Maithri-Mahinda illegal government.

Dudley Sirisena, the president’s younger brother, was allegedly a key figure that worked behind the scenes to broker the partnership between Sirisena and Rajapaksa. Incidentally, he is also the owner ‘Araliya’ rice mills.

Polonnaruwa district parliamentarian, Siripala Gamplath, from the UPFA, is the owner of the famous ‘Nipuna’ rice mills.

L. Mithrapala, who is the Polonnaruwa district organiser for the UPFA, is also the owner of the ‘New Rathna’ rice mills.

Matale district parliamentarian from the UPFA, Lakshman Wasantha Perera, is the owner of the ‘Lak Sahal’ rice mills.
 
The income tax policy of the former government was based on levels of profit, and not based on favouring certain sectors. Accordingly, whether you were in agriculture or in IT, if you made a profit over a certain level, you were liable to pay a tax of 14% or 28%. At the same time, if you did not make a profit, the company wasn't required to pay taxes regardless of which sector it was under.  

It could be argued that the income tax policy of the former government was based on fairness and equity, whilst also recognising the need for profitable companies to contribute to government revenue in order to fund public services such as free education, health, and infrastructure.

However, as per what is proposed by the 'purported' Minister of Finance Mahinda Rajapaksa, only large-scale companies and profitable multinationals engaged in the agriculture sector would benefit by paying reduced taxes. Companies like the ones mentioned above would qualify to pay taxes under the 28% tax bracket.

Therefore, it is highly questionable as to what the ‘purported’ government intends to achieve by introducing such haphazard policies aimed at reducing the tax liabilities of only a handful of companies that have direct affiliations to the ruling coalition.

Attorney General Jayantha Jayasuriya has withdrawn the petition submitted to the Court of Appeal against Bodu Bala Sena's Secretary, Galagoda Aththe Gnanasara thero, today (23).

The Attorney General's petition challenged the decision taken by the High Court, which acquitted Gnanasara thero along with 12 other suspects, for forcibly entering a church (Malabe Calvary Christian Center) and causing damage to its property in 2008.

Two Chinese companies have been awarded contracts to improve facilities at the Jaya Container Terminal of the Colombo port. 

Minister of Ports and Shipping Mahinda Samarasinghe submitted a proposal to the cabinet to award the contract to the China Harbour Engineering Company Ltd., to expand the deep water anchorage capacity at the terminal.

Meanwhile, Shanghai Zhenhua Heavy Industries, which is another Chinese company, was awarded the contract to purchase three cranes to be used at the Jaya Container Terminal.

Minister Samarasinghe said that the cabinet approved a proposal to award the contract of purchasing three new cranes using the funds of the Sri Lanka Ports Authority, valued at LKR 25.7 million on the recommendation of cabinet appointed procurement committee.

The Sri Lankan rupee hit a record low of 180.6606 against the US Dollar today. 

The rupee fell to an all-time low at 179.50 on the dollar, compared with Wednesday’s close at 178.70/179.20. 

Moody’s had downgraded Sri Lanka on Tuesday for the first time since it started rating the country in 2010, blaming the political crisis for aggravating already problematic finances.

The CID has summoned the country’s topmost ranking military official CDS Admiral Ravindra Wijegunaratne to provide a statement in connection to the abduction of 11 youth between 2008 - 2009 by a group of Navy officers. The CID has accused the CDS of helping one of the main accused in the case Lt. Com Chandana Prasad Hettiarachchi alias Navy Sampath to abscond and leave the country. According to witness statements the CDS had provided Navy Sampath with the necessary monetary funds to escape. 

While Wijegunaratne was previously called before the CID, however, he avoided the summons by travelling abroad. Sources say President Maithripala Sirisena has been protecting the CDS and preventing his arrest. The President even attempted to transfer investigating officer of the case IP Nishantha Silva last week. However, it was later overturned following due to pressure from media, civil society and members of the public. The Navy group led by several Naval officers had abducted 11 men in 2008 - 2009 as part of an extortion racket.

The appointment of members to the selection committee was passed with 121 in-favor and none against in the 225 member parliament today. This is the third time the Maithri-Mahinda faction suffered defeat in Parliament. 

The illegal government had submitted seven names to the committee but speaker Karu Jayasurya agreed for five names in the 12 member committee as the meeting of party leaders held on Friday morning failed to reach a consensus on the issue. 

Speaker Jayasuriya named Lakshman Kiriella, Rauf Hakeem, Rishard Bathiudeen, Mano Ganeshan and Patali Champika Ranawaka (UNF) and Mavai Senathiraja (ITAK) and Vijtha Herath (JVP) as members.

Dinesh Gunewardene, Nimal Siripala De Silva, S B Dissanyake, Mahinda Samarasinghe, Wimal Weerawansa were named from the UPFA.

Speaker Karu Jayasuriya will chair the committee as per standing orders.

All 122 members of parliament that supported the no-confidence motions against 'purported' prime minister Mahinda Rajapaksa have filed a Writ of Quo Warranto in the Court of Appeal challenging the 'purported' government’s illegal continuation in office. 

The MPs have requested the Court of Appeal to issue a writ declaring that Mahinda Rajapaksa and the purported Ministers and Deputy Ministers have no authority to hold government offices following two successful no-confidence motions in Parliament. 

In November last year, the Supreme Court upheld the Court of Appeal judgment dated May 3, 2017 and its order in the nature of a Writ of Quo Warranto declaring that MP Geetha Kumarasinghe is disqualified to be a Member of Parliament and not entitled to hold office as an MP as she held dual citizenship.

Nalaka Godahewa, a controversial figure involved with various alleged malfeasance has been appointed as the chairman of Sri Lanka Insurance Corporation.

Nalaka Godahewa was the former chairman at the SEC Sri Lanka. His appointment to the SEC at the time was considered controversial and heavily criticized then because of his association with companies whose stock prices made sudden and steep gains.

He was notoriously associated with the Krishh transaction where allegations were leveled that large amounts of monies were purportedly requested by members of the ruling Rajapaksa regime.

Godahewa has worked two stints at SLIC previously, once when SLIC was controlled by the Distilleries Group headed by businessman Harry Jayawardhena at the end of which period, his contract was not renewed.

He emerged again as the Managing Director at SLIC under the Rajapaksa regime and resigned a few months before the Supreme Court of Sri Lanka returned the ownership of SLIC to the treasury, holding that the privatization was flawed.

Godahewa was later appointed to head the SEC at the height of the controversial Pump and Dump scandal.

He is also associated with the sale of 29% of shares at Lanka Hospitals PLC by the Distilleries Group after SLIC was returned to the full ownership of the treasury.

After the fall of the Rajapaksa administration in 2015, Investigations revealed that Godahewa was involved in the misuse of SEC funds, where it transpired that funds approved by the SEC board for the purpose of promoting share ownership amongst youth was diverted to an event promoted by MP Namal Rajapaksa.

This resulted in Godahewa facing charges, being remanded and he is currently out on bail, pending litigation.

Godahewa’s appointment bears striking similarities to the appointment of Kapila Chandrasena to SriLankan Airlines which was brought to the attention of the appointing authorities who promptly withdrew the appointment in the face of public dismay.

(NewsFirst)

The CIA has a recording of a phone call in which Saudi Crown Prince Mohammed bin Salman gave instructions to "silence Jamal Khashoggi as soon as possible," Turkish news website Hurriyet Daily News said on Thursday. 

It cited a prominent Turkish columnist as saying CIA director Gina Haspel had "signaled" the existence of the recording during a visit to Ankara last month.  

A Turkish official contacted by Reuters said he had no information about such a recording. "There is talk of another recording," Hurriyet newspaper journalist Abdulkadir Selvi wrote in a column, saying the purported call took place between Prince Mohammed and his brother, Saudi Arabia's ambassador to Washington. 

"It is being said that CIA chief Gina Haspel indicated this during her visit to Turkey," he wrote, adding that they had discussed Khashoggi, a critic of the kingdom's de facto ruler.  

"It is being said the crown prince gave orders to 'silence Jamal Khashoggi as soon as possible'," in a call which was monitored by the U.S. agency, he said. 

A day earlier, Turkish news site Haberturk released what it said was quotes from a tape of the Saudi dissident journalist's last moments.

Also Thursday, Federica Mogherini, the European Union's foreign affairs chief, said after talks with Turkey's foreign minister that a transparent and credible investigation into the killing of Khashoggi has not yet been completed.

Khashoggi, a critic of the kingdom's de facto ruler Crown Prince Mohammed bin Salman, was killed in the Saudi consulate in Istanbul on October 2. Riyadh has said it was seeking the death penalty for five suspects in the case. 

Speaking at a joint news conference with EU Commissioner Johannes Hahn and Turkish Foreign Minister Mevlut Cavusoglu in Ankara, Mogherini said she was completely against any application of the death penalty.  

(Reuters)

US Senator for the district of Maryland, Chris Van Hollen, had written to president Maithripala Sirisena urging him to accept the results of the two no confidence motions (NCM) that were passed in parliament by a majority of members of the House.

As a long time friend of Sri Lanka who has worked hard to strengthen the bonds between , Hollen expressed his 'deep concern' with the decision taken by Sirisena to remove PM Wickremesinghe.

"The actions taken during the last few weeks, however, put at risk the rule of law and democracy in Sri Lanka", he added.

Senator Hollen also warned that the decisions taken by the executive over the last few weeks could severely threaten the strong bilateral relationship that exists between the two countries.

"The decision to oust the sitting prime minister, suspend parliament, attempt to hold snap elections, and reject the votes of Sri Lanka's democratically elected representatives could also threaten the progress made in strengthening our bilateral relationship," he said.

The German Ambassador to Sri Lanka, Joern Rohde, in twitter message today (23), revealed that many western diplomats had met with UPFA members for discussions.

"Why this unfair criticism at Canadian HC and members of the diplomatic Community? Last Tuesday around a dozen envoys including Canadian HC and myself met with 4 leading UFPA MPs/Ministers on their request. We respected their request for confidentiality,” the German envoy said.

This was in response to parliamentarian Namal Rajapaksa's tweet with regard to the comments he made about western diplomats meeting with the UNP to discuss the current constitutional crisis.

The Canadian High Commissioner to Sri Lanka, David McKinnon, shot back at the young parliamentarian yesterday on twitter over a comment he made on the United National Party (UNP) and Tamil National Alliance (TNA) meeting diplomats in Colombo to discuss the political crisis.

Namal Rajapaksa went on the back foot by stating that he was not criticizing the diplomatic community. 

The Sri Lankan rupee fell to an all-time low of 179.00 per dollar on Wednesday, a day after Moody’s downgraded the country’s credit rating, as a political crisis worsens a rout in the currency. Moody’s downgraded Sri Lanka on Tuesday for the first time since it started rating the country in 2010, blaming the political crisis for aggravating already problematic finances.

The downgrade coincided with a decision by the International Monetary Fund to delay discussions on its loan tranche to Sri Lanka. The political uncertainty remained the main concern of investors a day after President Maithripala Sirisena asked an all-party meeting to hold a third vote on a no-confidence motion against Prime Minister Mahinda Rajapaksa after rejecting the first two motions passed by a majority in the parliament, deepening the country’s political crisis.

The central bank last week unexpectedly raised its key policy rates, in a move aimed at defending a faltering rupee as foreign capital outflows pick up amid an escalating political crisis and rising U.S. interest rates.

The currency ended at 178.70/179.20 per dollar on Wednesday, compared with 177.30/50 at previous close. It has weakened more than 3.3 percent since the political crisis began on Oct. 26 and more than 16.4 percent so far this year.

Foreigners bought a net 10.2 million rupees worth of stocks on Wednesday. But they have offloaded equities worth 7.7 billion rupees since the political crisis started on Oct. 26. The bond market saw outflows of about 22.9 billion rupees between Oct. 25 and Nov. 7, central bank data showed. This year, there have been 17.3 billion rupees of outflows from stocks and 112.8 billion rupees from government securities, bourse and central bank data showed.

The 5-year bond yields rose about 25 basis points on Wednesday, market sources said. The Colombo stock index ended up 0.04 percent at 5,950.19 on Wednesday. It declined 0.39 percent last week and has fallen 6.5 percent so far this year.

Stock market turnover was 594.1 million Sri Lankan rupees ($3.33 million) on Wednesday, less than this year’s daily average of 836.9 million rupees. (Reuters)