Budget 2020 relief for middle class, war veterans

(COLOMBO, LANKAPUVATH) –Several relief measures including a comprehensive increment of public servants’ salaries, allowances of disabled war heroes and a decision to pay the full salary to disabled war heroes for lifetime was presented by the Finance Minister Mangala Samaraweera in the Vote of Account which was passed unanimously when it was tabled in Parliament last week.

The salary increments have been calculated based on the P.A. Circular 6/2016 and on the recommendations of the Ranugge Salary Commission. Accordingly, public servants will be paid half of the new increase from January 1, 2020 and the rest will be paid from 01 January, 2021.

The Vote on Account provides for the increase of war veterans’ allowances after a lapse of 20-years, including payment of full salary to disabled veterans for life and, thereafter, its benefits to be passed on to their dependents.

The Vote on Account which was presented for the first 4-months of 2020 was passed unanimously. The recurrent and capital expenditure for Rs. 1, 470 billion is expected to be spent during that period while another Rs. 5 billion is expected to be spent for the Advance Account.

In presenting the Vote of Account last week, the Finance Minister highlighted the relief granted to various sectors.

He also disclosed a decision to increase the Public Servants’ Disaster Loan limit to Rs. 350,000 from Rs. 250,000 while reducing the loan interest from 4 per cent to 3 per cent.

The other main action proposals tabled by Samaraweera included;

To increase the current sum of Rs. 6,000 loaned to public service staff to buy bicycles up to Rs. 10,000 and to reduce its interest to 3 per cent from 4.2 per cent.

To increase the current annual uniform fee for Office Assistants’ Service to Rs. 5,000.

To increase the Spectacle Allowance to Rs. 8,000.

To implement a programme to provide an annual mandatory training for a minimum of 5-days for the officers attached to the Public Servant Office Assistant Service, the Drivers Service and the Management Assistants Service.

For Grama Seva Officers: to increase the office allowance to Rs. 1,500; to double this allowance for Pradeshiya Sabhas; to increase the transport allowance within the Local Government to Rs. 6,000.

Police Officers will see a replacement of the 14-day composite allowance with a 20-day allowance, thereby increasing the salary by 238 per cent.

Luxury Tax on Motor Vehicles will be amended to provide chargeability of the tax based on the price of the vehicle instead of engine capacity.

Levy on Foreign Commercial Transactions will be charged at the rate of 3.5 per cent on the Credit/Debit card payments made to purchase goods/services from outside Sri Lanka; the date of implementation of the Levy will be declared by the Minister by order published in the Gazette; •The Carbon Tax was imposed under the Finance Act, No. 35 of 2018. The tax is payable by the vehicle owners based on the fuel type and the age of the vehicle at the time of renewal of annual registration. This tax is applicable only for this year (2019) and will be removed from 01 December, 2019.

The Cellular Tower levy was imposed under the Finance Act, No. 35 of 2018. According to the existing provisions, proceedings to be initiated at the Magistrate’s Court, if any operator defaults the payment of Levy. Provisions for a surcharge will be introduced if an operator defaults the payment of Levy, prior to initiate Court proceedings.

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