Allow CB’s independence – official parliamentary report

An official parliamentary report has urged that the Central Bank should be permitted to function as an independent institution that certifies its “accountability for financial regulations and inflation control”.

The second report by the Sub-Committee of the National Council in identifying short and medium term programmes related to Economic Stabilisation, chaired by MP Patali Champika Ranawaka, also recommended establishing a mechanism to improve the efficiency of the judiciary to ensure the optimal efficiency of the judiciary and prevent delays in judicial activities.

It also recommended the introduction of a system to ascertain the credibility of the reports presented to Parliament in accordance with the financial regulations of the government and provide the opportunity to the people to challenge the facts in those reports.

Among other recommendations were introducing checks and balances among the Ministry of Finance, Treasury and the Central Bank; implementing a National Policy on Bribery or Corruption; recruiting expert investigators and prosecutors to ensure the independency of the Commission to Investigate Allegations Bribery or Corruption; and discussing the “Ignorance of impunity,” a major problem in Sri Lanka, with the participation of legal academia in law schools in Sri Lanka.

The report said that with the new taxes the total number of registered income tax payers is expected to be 1.6 million compared to (as of 31.12.2021) a total of 507,095 taxpayers (individuals and companies).

The total amount of tax collected in 2019 was Rs. 1,025.319 billion, but it decreased to Rs. 523.934 billion in 2020 due to the tax concessions given and due to other reasons.

“With the new tax revisions, it will be Rs. 915 billion in 2022 and the total expected revenue in 2023 will be Rs. 1,667 billion,” the report said.

It said the uncontrolled financial flow (shadow economy) is as high as 44 per cent due to the lack of a system to evaluate the proper status of income generators. “It was observed that there are many professions and businesses that generate income but are not recorded in any way. Money laundering and hiding of money in the country has also created an obstacle to earn the revenue of the government properly,” it said.