11 Bills face SC test; petitioners say Parliament will lose control over pubic finance
The Government’s bid to amend the Fiscal Management (Responsibility) Act and get 10 other bills passed on an urgent basis has run into trouble with at least 15 petitioners moving the Supreme Court and challenging their constitutionality.
The petitioners charge the 11 Bills that were placed on the Order Paper of Parliament along with ten other Bills on March 8, would take away Parliament’s control over public finance.
By increasing the permissible levels of government guarantees for borrowing under the proposed amendment to the Fiscal Management Act, the financial status of the country and public finance would be badly affected, exposing generations of citizens to financial risks, the petitioners said.
They said that certain clauses of the bill were unconstitutional and needed to be approved by the people at a referendum and be passed by a two thirds majority.
Centre for Policy Alternatives Executive Director Paikiasothy Saravanamuttu, one of the petitioners, said the objective of the Act was to instil financial discipline but the Government through the amendment was seeking to remove all restrictions on borrowings.
Therefore, the proposed amendment would nullify the effects of the original statute, while departing from responsible fiscal management principles, he argued.
He said the amendment would enable the Government to increase the guarantees on borrowings without parliamen- tary approval. This was a violation of the Constitutional requirement which insisted on parliament’s control over public finance, he said.
Petitioner A.A.M. Nizar challenging the Betting and Gaming Levy (Amendment) Bill argued that clause two of the Bill would enable the Government to grant Value Added Tax (VAT) and Nation Building Tax (NBT) exemptions arbitrarily to certain businesses covered by the Act.
He argued that the bill would erode Parliament’s control over public finance. He also said that offering tax concessions selectively would be a violation of Article 12(1) of the Constitution.
Since clauses one and two of the Bill would take away the sovereignty of the people, the petitioner claimed that the amendment could be passed only with the approval of the people at a referendum in addition to a two thirds majority in parliament.
Petitioner Nandalal Karunaratne said certain clauses of the “Nation Building Tax (Amendment) Bill could become law only after it was approved by the people at a referendum and by a two-thirds majority in Parliament. The amendment sought Nation Building Tax exemption for equipment or items imported for international sports events approved by the Finance Minister.
He also argued that the amendment if passed would take away Parliament’s control over public finance and therefore would be a violation of the Constitution.
Challenging the Bill titled Finance (Amendment) Act, petitioner, Yapa Mudiyanselage Punchibanda said this bill would also need a referendum and a special parliamentary majority as it empowered the minister to declare a “bonded Area” or a “free port”, by regulations and give tax exemptions to certain revenues without parliamentary approval.
The petitioners stated that some of clauses of these bills had retrospective effect and therefore, were ultra vires the Constitution.
Among the other bills whose constitutionality is being challenged before the apex court are the Strategic Development Projects Amendment Bill, the VAT Amendment Bill, the Inland Revenue Amendment Bill, the Notaries Amendment Bill, the Power of Attorneys Amendment Bill, the Registration of Documents Amendment Bill and the Tax Appeals Commission Amendment Bill.