This refers to my letter under the above caption which appeared in
the Daily News on November 29, 2010.
Inspite of the fact that majority of the banks have made enhance
profits as indicated below it is a matter for regret that they continue
to pay a low interest to the senior citizens although they expected some
relief from the commencement of this year.
Name of Bank Profit for the period Rs. Mn 2010 2009
People’s Bank 5,206 3,320
Bank of Ceylon 6,365 3,084
Commercial Bank 5,523 4,305
Hatton National Bank 4,464 4,352
Sampath Bank 3,303 2,098
Seylan Bank 1,229 543
DFCC Bank 6,616 1,327
National Development Bank 1,576 1,682
National Trust Bank 1,002 502
Pan Asian Bank 362 388
Moreover according to the Budget for 2011 the Corporate Tax from
Banks is reduced from 35 percent to 28 percent and the Nation Building
Tax also reduced. This will result in a further increase in the
profitability of the Banks.
In the circumstances I wish to appeal to the authorities concerned to
intervene in this matter and ensure that all senior citizens specially
those who have retired from the Corporation/Private Sector who are not
entitled to a pension and who have invested a part of their terminal
benefits in order to receive a monthly interest as income are paid an
increased interest on their fixed deposits from the enhanced profits
which the Banks continue to earn or consider paying a bonus interest
which was paid from 1.1.2010 and later withdrawn in July, 2010.
I read in the Daily News on March 26, of two famous American
millionaires, who are eager to help the poor in a very effective manner,
thereby persuading others in their category to follow suit.
We are fortunate to have men of their wealth and calibre, because in
the midst of whom there are many apart from helping the poor, does not
even bother to acknowledge there are thousands around them who go to
their mats daily on empty stomachs, specially children.
Usually, men of wealth, not all, shun those who are poor, similar to
the story in the Holy Bible about Lazares and the wealthy man. Under the
above circumstances these two gentlemen and their spouses should be
admired for their desire to help those who are less fortunate. This
attitude is unique in today’s world where most men of wealth continue to
accumulate more and more wealth, becoming extremely selfish.
Helping the poor would assist the government to eradicate poverty to
some extent, which needs the assistance of those who are wealthy,
narrowing the gap of the two categories.
The Municipal quarters of Roxy Watte, Wellawatte 480 Galle Road,
Colombo 6 area housed families of those who worked at the Colombo
Municipal Council (CMC). However all those employees have now retired
and many are dead. Their descendants are now squatters in these quarters
and they have even built structures and rented them out.
Under an act passed in Parliament (Recovery of possession of
government quarters) government quarters can be recovered without
lengthy court proceedings. These illegal occupants have even filed a
case against the CMC. CMC lawyers should point out the act to the judge
and take action to evict these squatters - who can also be charged under
the public property act for causing losses to the CMC.
Government’s decision of increasing the duty of vehicle import is not
a bad move. But there are serious implications of the action specially
to individuals who had already placed an order to import a vehicle for
their personal use.
It is an increasing trend that individuals place orders by opening
LC’s on their own to get the price advantage without going through a car
seller. This had helped to reduce cost of a vehicle to a user. Here, an
individual relying on the existing duty structure places an order to fit
into his/her budget which is mostly financed by a loan that is limited
to the individual’s repayment capacity.
Bank makes sure the total cost of import and the duty component is
available with the importer in cash form before establishing the LC.
After all this, when the duty is upwardly revised after the vehicle is
shipped, the individual faces serious consequences especially when the
increase is substantial. The Individual has not done anything illegal.
He had only relied upon the existing mechanism to enter into a
transaction which will mature in less than a month!. The individual has
no option to cancel the order if the total cost exceeds his capacity.
The recent increase especially on hybrid vehicles had caused
substantial consequences to such individuals as the increase has gone up
to as high as 163 percent increase of the existing duty (38 percent to
100 percent). For an example if the existing duty is Rs 1.5mn., new duty
will be approximately Rs 3.9mn, an increase of Rs 2.4mn! One can imagine
the plight of an individual who needs to find another Rs 2.4mn to clear
He did not do anything wrong. He only placed an order to import a
relatively economical vehicle which is environmental friendly as
acknowledged by the government.
So it is obvious that the government’s good intention to increase
vehicle duty will not achieve its goal (all policy decisions should
finally benefit the General Public) if justice is not done especially to
the individuals who relied upon the existing mechanism to import a
vehicle of a category that was encouraged by the government few months
ago. By allowing such importers who had opened LC before the date of
duty hike to clear through the old duty structure the government is not
losing its planned revenue as it can anyway recover the duty that was
applicable on the date of opening the LC.
The very reason to decrease the duty in 2010 was to gain from high
volumes. Therefore the fact that even large volumes of vehicles are
pending clearance is not a justifiable reason to apply new duty on such
vehicles. Of course one can say this is a good opportunity to collect
substantial revenue for the government which I am sure is a strategy of
an opportunist than a responsible government.
If the government has concerns that people will misuse this by
backdating the LC, the same can be verified with Central Bank as Banks
have already reported LCs opened before the duty hike to Central Bank
which is verifiable.
We still believe the Government will pay due attention to this
situation which can cause multiple issues like vehicles getting delayed
in the harbour not being able to clear due to financial issues and other
issues faced by Banks due to increase in the cost of import.