The Hon. (Dr.) Harsha de Silva

¶ 01 Public Finance Committee Report

¶ 02 I lay on the Table the Report of the Committee on Public Finance relating to: (i) an Order under the Foreign Exchange Act, No. 12 of 2017; (ii) Regulations under the Payment and Settlement Systems Act, No. 28 of 2005; (iii) a Regulation under the Casino Business (Regulation) Act, No. 17 of 2010; and (iv) Regulations under the Colombo Port City Economic Commission Act, No. 11 of 2021.

¶ 03 Ordered to lie upon the Table.

¶ 04 Brief explanation:

¶ 05 - Under the Order made pursuant to the Foreign Exchange Act, residents and entities investing abroad may take up to USD 500,000 per year for investments. Previously this threshold was USD 2 million, which had been reduced due to the foreign exchange crisis. The current limit is to be continued for another six months.

¶ 06 - Regarding the Regulations under the Payment and Settlement Systems Act, these pertain to hawala and hundiyal systems. While these methods are not per se illegal, they are unregulated. Therefore, within the 12 months from June 2024 to May 2025, entities conducting cross-border value transfers via such systems must register. The Committee requested the Central Bank to conduct an in-depth review and report, but the Regulations have been approved and submitted.

¶ 07 - On casinos, a licence was issued in December 2023 and approval is sought for its operationalization. However, there is still no Casino Regulator. Since 2022, the Committee on Public Finance has pressed the Government to establish a regulator; multiple deadlines have lapsed. We will approve this Regulation as the action has already been taken, but a Casino Regulator must be established urgently with a clear timeframe.

¶ 08 - On the Port City Regulations, these are largely standard engineering specifications and were passed. One matter not passed relates to commitments under the Sri Lanka–Singapore Free Trade Agreement to phase out PAL (Port and Airport Levy) on certain HS lines over five annual tranches. Though signed in 2018 and suspended until 2022, the process has since resumed, but Ministers did not concur at the Committee. As Chairman, I recorded the lack of Government concurrence; they said policy requires further review. Therefore, there is an issue regarding FTA implementation which the Government undertook to analyse and report to the Committee on Public Finance with its position expeditiously. I draw the attention of the House to this important matter.

¶ 09 Thank you, Hon. Speaker.