Auditor General's report on Central Bank bond scam, hike in VAT dominate House proceedings

The Auditor General’s ( Aud. Gen.) report into the alleged Central Bank (CB) Treasury Bond (TB) scam and the increase in Value Added Tax ( VAT) dominated proceedings when Parliament met this week.

The Committee on Publ i c Enterprises (COPE), investigating the TB issue and the role played by former CB Governor Arjuna Mahendran, had commissioned the Aud.Gen. to provide a report on the matter. The Aud.Gen. had handed over the complete report to the Speaker on June 29. When Parliament convened on Tuesday ( 5), Speaker Karu Jayasuriya told MPs that a decision on providing them access to the full report compiled, containing 1251 pages, will be made after consultations with the relevant parties including the Aud. Gen., Attorney General ( AG) and the newly ap p o i n t e d Governor of the CB. This was over concerns regarding the secrecy of sensitive information contained in the report. So far, only a concise summary of the report, running to 102 pages, has been made available to COPE and MPs.

There were further developments with regard to COPE when United National Party (UNP) member in the committee, Kandy District MP M. Velu Kumar resigned from the Committee. His position has now been filled by State Minister of International Trade, Sujeewa Senasinghe.

The increase in the Value Added Tax (VAT) from 11% to 15% also continued to be raised, both inside the House and outside. The spate of countrywide protests against the VAT increase shows no signs of abating, with traders shutting down shops in several areas of the country in protest at the decision not to exempt retail and wholesale establishments from the VAT. Though the Government announced the increase in VAT, it is yet to be approved by Parliament. Several petitions have already been filed before the Supreme Court seeking an order to revoke the decision to increase VAT.

In this backdrop, Finance Minister Ravi Karunanayake on Friday (8) presented the VAT (Amendment) Bill to Parliament and requested it be taken up for debate without delay, as certain parties, according to him, were trying to gain political mileage from the issue. The Bill is scheduled to be taken up for debate on July 20. However, this date may change if more petitions are filed before the Supreme Court, it was announced.

Also on Friday, Minister of Industry and Commerce, Rishad Bathiudeen told Parliament, Cabinet would meet on Tuesday (12) to decide on the prices of more essential goods and that, these would be exempted from VAT. A total of 15 essential items have currently been gazetted as being exempt from VAT. In the face of the rising cost of living, the Government announced this week that a further 10 essential food items will be identified and gazetted so that, they too will be exempted from VAT.

Minister Bathiudeen noted that prices of items on which the VAT has not been imposed, should be less. However, he acknowledged that some of the items are being sold at a higher price in the general market and that, prices in rural areas are even higher due to intervention by middlemen. "Therefore, the present pricing formula implemented by the Consumer Affairs Authority ( CAA) must be re- published and proper monitoring activity established district- wise to check and raid," he stressed.

The CAA has also set up an additional 1977 hotline for consumers to lodge complaints against errant traders who overcharge consumers, it was also stated.

The issue of relevant Ministers not being present to provide answers during oral question time was again highlighted this week, when neither the Minister of Petroleum Industries Chandima Weerakkody nor Deputy Minister Anoma Gamage were present in the House to respond to a question raised by Chief Opposition Whip Anura Kumara Dissanayake. In response, Speaker Karu Jayasuriya announced that revised Standing Orders of Parliament will be implemented from August, making it compulsory for relevant subject Ministers, Deputy Ministers or State Ministers to be present in the House to respond to questions raised by MPs.

The spate of countrywide protests against the VAT increase shows no signs of abating, with traders shutting down shops in several areas of the country in protest at the decision not to exempt retail and wholesale establishments from the VAT