‘Enterprise Sri Lanka’ loan counters at BOC and People’s Bank : Collateral-free concessionary loans for entrepreneurs | Sunday Observer

‘Enterprise Sri Lanka’ loan counters at BOC and People’s Bank : Collateral-free concessionary loans for entrepreneurs

The new Inland Revenue Act that came into effect in April this year will undergo certain amendments within the next six weeks to bring in more clarity and simplification to the new tax law, a senior official of the Ministry of Finance said on the sidelines of a ceremony to open the ‘Enterprise Sri Lanka’ counter at the Bank of Ceylon head-office in Colombo last week.

The Payee Tax was a vital area that intended to be addressed through new tax law among an array of changes aimed at creating a tax friendly culture and boost revenue for the government coffers.

Deputy Treasury Secretary S.R. Attygalle said while certain changes to the Payee Tax , doing away with the Withholding tax on foreign loans and amendment to minor savings accounts will be effected within the next one and half months.

“Certain amendments to the Payee tax could be made by the Commissioner General of the Inland Revenue Department while other changes could be done by the Finance Ministry,” Attygalle said.

The employees tax-free slab was increased from Rs. 750,000 under the previous Act to Rs. 1.2 million under the new Act.

The new tax law is said to ease the burden of the low income segment of the country by focusing on taxing the high income earners of the country. The new tax law is expected to revise the current direct to indirect tax ratio of 20:80 to 40:60 targeting the high earners in the country.

However, tax experts say that increasing the income tax ratio will not be an easy task as many loopholes lie in tax administration which helps tax evaders.

According to Finance Minister Mangala Samaraweera only around 18 percent of the population pay taxes.

Speaking on the facilities provided by the government to support entrepreneurs Samaraweera said the government hopes to create 100,000 entrepreneurs in the country within the first year of the program consisting of collateral free concessionary loan schemes for entrepreneurs.

“The Arambuma, a loan scheme for starters, the ‘Home Stay’ scheme to rent out homes to tourists, fisheries and agricultural loan scheme are aimed at reawakening the village economy through entrepreneurship development,” the Minister said.

Minister of Public Enterprise and Kandy City Development, Lakshman Kiriella said villagers have no idea about bank loans. Therefore, they depend on ‘poli mudalalis’ (money lenders) to fund their businesses.

“Villagers fear to go to a bank because of the questions asked by bank officials especially whether they have a property or some other asset to mortgage. The need for collateral has been a stumbling bloc for young entrepreneurs who finally fall victim to high interest lenders,” the Minister said.

Bank of Ceylon (BOC) Chairman Ronald C. Perera said the Gamperaliya program should not only reawaken the village but the entire country. “We will extend our fullest support through our branch network across the country.”

The BOC held awareness programs on Enterprise Sri Lanka in Tangalle and Nikawaratiya this month. The Prime Minister will open the counter at the BoC branch in Jaffna on Sunday.

Under the ‘Enterprise Sri Lanka’ program, a dedicated loan counter was launched at the People’s Bank headquarters in Colombo 2, under the auspices of Minister of Finance and Mass Media Mangala Samaraweera. Minister of Public Enterprise and Kandy City Development Lakshman Kiriella, State Minister of Finance Eran Wickramaratne; Member of Parliament Wijepala Hettiarachchi, Secretary, Ministry of Finance Dr. R. H. S. Samaratunga, Chairman of People’s Bank Hemasiri Fernando, Member, Director Board of People’s Bank, Chandra Ekanayaka, Chief Executive Officer/General Manager N. Vasantha Kumar and Members of the Corporate and Executive Management of People’s Bank were also present.