The Hon. (Dr.) Harshana Suriyapperuma - Deputy Minister of Finance and Planning

¶ 01 Hon. Presiding Member, the subjects scheduled for debate today are: regulations under the Import and Export (Control) Act; an order under the Foreign Exchange Act; regulations under the Payments and Settlements Systems Act; a regulation under the Casino Business (Regulation) Act; an order under the Ports and Airports Development Levy Act; and regulations under the Colombo Port City Economic Commission Act. Unfortunately, instead of discussing the relevant matters, some spoke on unrelated topics. If previous governments had acted according to the country’s needs, the nation would not have fallen off a cliff.

¶ 02 Because past actions ignored depth and dimension, we are now in this abyss. The present Government is prudently managing the economy. We will not simply discard previously issued Gazettes; rather we will review deficiencies, because some were partly operational. We restart with care, refer matters to the Committee on Public Finance (COPF), seek clarifications, and proceed in an orderly way.

¶ 03 Past governments nurtured inefficiency, enabling corruption and fraud. If existing institutional structures had been properly managed, the country would not have fallen. For decades, billions were spent “on agriculture,” yet we inherited a country without adequate paddy storage. Loans in the hundreds of billions were spent, and the economy was broken to the point interest could not be paid. Despite massive expenditure, we see few assets. The 2023 appropriation shows huge unfunded gaps. That is how weakly the economy was managed.

¶ 04 Since we formed the Government, our measures are yielding results within a short period. Some say 100 days have passed; perhaps they cannot count from 1 to 100 or seek to mislead people. We have been rebuilding institutions, activating systems, bringing capable people together, and we already see positive outcomes.

¶ 05 First, the regulation under the Import and Export (Control) Act: to update quality standards. We closely examined whether the changes were for the nation, consumers and producers, or for deals of a few politicians or officials. With careful scrutiny, we have been regularizing many such Gazettes.

¶ 06 This Gazette was issued on 17 May 2024. Those who issued it did not bring it to Parliament for approval. Issuing a Gazette without following through shows a culture of plastering over problems rather than solving them. For example, the parate law was extended for six months and then simply abandoned; our Government applied a proper solution to help businesses stand up.

¶ 07 Why was the May 2024 Gazette not brought to Parliament? We see a pattern of creating issues to manage politically rather than resolving them. Our Government prepares proper solutions step by step, building investor confidence, domestic and foreign.

¶ 08 Next, the order under the Foreign Exchange Act, No. 12 of 2017: this is a procedural requirement to conclude work already undertaken—vital for Central Bank operations—though prepared by mid-June 2024 and delayed. Our Government has now progressed it through proper procedures.

¶ 09 Third, the 2024 No. 1 Gazette for Money or Value Transfer Service providers: aimed at combating money laundering by bringing informal value transfers like hawala into a registered, regulated framework. When you register and legitimize, participation may increase; when you leave it outside, it remains underground. Therefore, COPF called for further details from the Central Bank’s Financial Intelligence Unit (FIU) to assess the impact—what would be the effect on the country? We need a proper impact assessment before finalizing.

¶ 10 Next, the Casino Business (Regulation) Act regulation issued on 29 May 2024. The Gazette text itself shows it applies only to applicants who had completed evaluation and paid the prescribed licence fee for the period commencing 1 January 2023 and ending before 12 January 2024. Upon inquiry, we found it targeted a single entity. Evaluation was completed on 16 November 2023; sent to the Finance Minister on 29 November 2023 for confirmation; Rs. 500 million was paid on 11 December 2023. Thirty days later, a new Gazette imposed a Rs. 5 billion fee for licences issued on or after 12 January 2024—ten times higher. The earlier licence at Rs. 500 million closed just 30 days before the tenfold fee took effect. Those responsible, including the Minister and officials, likely knew of the impending change. This raises concern whether the sequence served the country or a prior deal. A foreign investor is involved; they followed procedures, obtained approval and paid. If we now refuse, it could send a wrong signal to foreign investors. Therefore, despite deficiencies and opacity in the previous process, we had to take a decision mindful of the ongoing process and the country’s reputation.

¶ 11 On the Ports and Airports Development Levy and the Singapore FTA: trade agreements are to integrate and advance, but they must deliver mutual benefit to producers, manufacturers, entrepreneurs, and consumers. We found questionable areas. For example, page 93A of the shared schedule shows motor cars, including station wagons and racing cars, both under HS 8703 less than three years old and those more than three years old, exempted from taxation under the SL–Singapore FTA. Such loopholes, if exploited, could seriously harm local producers. Hence we are moving carefully to ensure proper systems and close gaps, while maintaining the economic stabilization we have achieved and delivering on the people’s mandate. Thank you.

¶ 12 Question put, and agreed to.