Bankers write to the Treasury

Commercial banks, visibly upset over the tax on transactions that was proposed in the recent budget, have jointly written to the Treasury requesting its removal, some bankers told the Business Times.

The letter was sent through the Sri Lanka Bankers' Association (SLBA) this week, they said.

This time the banking sector was the main target for money churning for the government with the budget proposing a 0.02 per cent tax (this is down from 0.05 per cent last year when it was first proposed) on banking transactions. This tax cannot be passed down to the customers. In 2016, Rs. 106 trillion has been recorded as transactions and the Treasury expects a large amount this year.

This tax also called the “Debt Repayment Levy” is a temporary tax to be enacted for three years with the view of utilising the tax proceeds to fund the government’s debt repayment and generate Rs. 20 billion revenue (second highest revenue measure) to the government.

The bankers say that it’s not fair to tax them thinking that banks are the golden goose noting that their return on equity is just 17 per cent. “In what country is this so?” one CEO queried. He said the Treasury should increase corporate taxes to drum up cash.

A simple pineapple vendor walks past the sign outside the Shangri- La hotel in Colombo. Like the Taj hotel, Shangri-La is located amidst a great mix of people, all kinds of food and different entertainment at the breezy Galle Face Green. Meanwhile hotels are preparing for the winter season and the year- end Christmas and New Year events with excitement.