Rampant corruption in state sector causes negative impact on Lankan economy
Corruption, inefficiency and improper financial discipline in the government sector have created a tremendous impact on Sri Lanka’s economy.
Concerned about these issues, the Institute Chartered Accountants of Sri Lanka (CA Sri Lanka) and the Association of Public Finance Accountants of Sri Lanka (APFASL – Public Sector Wing of CA Sri Lanka) are together working towards strengthening public fnancial management practices in the state sector.
V. Kanagasabapathy, President, APFASL, at a media conference in Colombo this week explained as to how this whole process works and said that in adopting financial management practices would enhance transparency, accountability and good governance in the public sector.
He said that they have made a series of proposals to the government for inclusion in the 2016 budget and one such proposal is an ‘Amendment to standing orders of Parliament to strengthen Performance Review by COPA and COPE and to establish a Budget Committee to review National Budget’.
The other proposals are to expedite the enactment of Public Finance Act and to repeal the outdated Finance Act No.38 of 1971; transformation of archaic age old Financial Regulations into a user-friendly guide; implementation of Code of Best Practice in Corporate Governance for Public Enterprises; fast tracking the migration to accrual system of accounting; implementation of Sri Lanka Public Sector Accounting Standards; and encourage all the public sector agencies to participate in the Best Annual Reports/Performance Reports and Accounts Awards Competition and expedite enactment of Public Audit Bill.
The CA Public Sector Wing has launched, he pointed out a new professional qualification exclusively for professionals in the public sector. They work towards launching and implementing 10 Sri Lanka Public Sector Accounting Standards (SLPSAS), while an additional 10 standards is in the process to be adopted.
He said to bring about excellence in financial reporting by preparing and presenting financial statements in compliance with SLPSAS, they are organizing the Best Annual Reports and Accounts Awards Competition and all government entities which have finalized their financial statements and annual reports can apply.
They also conduct capacity building programmes to update the working knowledge of the public sector financial management personnel, he asserted.
Arjuna Herath, President, CA Sri Lanka said that there should be extraordinary discipline within Public Finance Management and revenue and expenditure of the state require radical overhaul. Tax exemptions, he indicated should be minimal as current rates of tax for both personal and corporate income tax as such rates are competitive with the rates in the region and have been consistently maintained over the past four years.
He said that as having a multitude of income tax rates can complicate both revenue administration and collection and also lead to carefully planned tax evasion resulting in substantial revenue loss, there should be a move to a two rates structure for corporate from the current multi rates structure starting from 10 to 40 per cent.
He said that the government should not shift revenue collection from a revenue collection authority to different government institutions. The Land (Restriction and Alienation) Act passed for the Land Tax in the parliament last year has become an impediment to FDI and therefore the Government should permit foreigners and foreign owned companies to purchase and own land restrictively for purpose of industry and services.