Finance Minister introduces optional plan for banks to pay Super Gains Tax

Sampath-Bank

Oct 20, 2015 (LBO) – Sri Lanka’s Finance Minister Ravi Karunanayake revealed in Parliament on Tuesday that an optional plan has been introduced for banks to pay super gains tax.

“Instead of banks paying (the tax directly) we are giving the opportunity back to them,” Karunanayake said.

“So instead of paying 1 billion we call upon them to create that into 9 or 10 times over and lend it to the government for our capital expenditure which we are buying at 9 to 10 percent but you are giving us at 6.5 to 7 percent,”

“It came from one of the bankers and I appreciate the suggestion that he gave.”

Finance Minister Ravi Karunanayake said they are open to suggestions.

“If they say they’ll invest 3 times over. Let’s take that option out. All we want is to grow the economy.”

The Finance Ministry is to collect about 35 to 40 billion rupees from the banks through the super gains tax.

Karunanayake further said that for non banks the tax is not written off from this year’s accounts and it will be written off as a note to the prior year accounts.

“We don’t need anyway that the adjustments made to this year accounts because that has no reflection at all. It’s a note to the previous year accounts,”

“We’ll ensure that this is an accepted practice and we instructed the accounting practicing standards to ensure its compliance,” he said.

Karunanayake said the government needs to recycle the funds and generate new jobs especially in lagging regions in the country.

“So what we get; if they basically take it to the areas where we want to invest, lagging areas such as north and east or areas having underemployment, that is what we exactly want.”

“If they feel employment generation is possible with that money that we have imposed on the tax; go ahead and do that, you create the jobs and we’ll set the standards. But ensure that is done in good spirit.”