The Hon. (Dr.) Harsha de Silva

¶ 01 Public Finance Committee Report

¶ 02 Hon. Speaker, I present the Report of the Committee on Public Finance with regard to:

¶ 03 (i) The Order under Section 3 of the Stamp Duty (Special Provisions) Act, No. 12 of 2006, published in Extraordinary Gazette No. 2429/39 of 27.03.2025;

¶ 04 (ii) The Regulations under Section 20, to be read with Sections 4(1) and 14, of the Imports and Exports (Control) Act, No. 1 of 1969 as amended by Acts Nos. 48 of 1985 and 28 of 1987, published in Extraordinary Gazette No. 2434/12 of 29.04.2025; and

¶ 05 (iii) The Regulations under Section 20, to be read with Sections 4(1) and 14, of the Imports and Exports (Control) Act, No. 1 of 1969 as amended, published in Extraordinary Gazette No. 2435/02 of 05.05.2025.

¶ 06 Ordered to lie upon the Table.

¶ 07 Hon. Speaker, give me two minutes to make a brief clarification.

¶ 08 Stamp duty has been increased from 1% to 2% on certain leases or rentals. A small issue has arisen: even if leases are for 99 years, the maximum stamp duty registration is only for 20 years. We have asked the Ministry of Finance to examine this to enhance Government revenue.

¶ 09 Second, during the post-COVID lifting of import restrictions, some relaxations created issues. During the period when imports were halted, import of casino machines was also halted. Now permission is being granted for importing such machines. Since Government is bringing a Bill on casinos imminently, we informed that any such imports must be aligned accordingly. We directed that all casino-related equipment imported be placed on a separate registry. I table the relevant document.

¶ 10 Regarding vehicle imports, a 15% depreciation is allowed for used vehicles. Under the “used vehicle” category, even cars run only 5 km or 3 days old qualify, and 15% is straightaway deducted for duty in the invoice. When we queried this, officials said it was under the existing law and otherwise duty should be levied on transaction value. We ordered a three-day random sample review. I proposed sampling 500 vehicles. On May 21, 22 and 23, a random sample of 500 vehicles showed 88% (171 of 194 vehicles classified as used) had odometer readings under 1,000 km.

¶ 11 Based on that three-day random sample, as per the Ministry of Finance, the revenue loss to Government was Rs. 257 million. This is serious. We have again proposed a study to ascertain if there is an error or deficiency with the 15% reduction. I bring this to your attention; we are examining it.

¶ 12 Thank you, Hon. Speaker.

¶ 13 Placed in the Library.