No harm to the Employee Provident Fund – Manusha

Posted by Editor on September 16, 2023 – 11:03 am

Manusha Nanayakkara, the Minister of Labour and International Employment, confirmed that the prevailing 9% worker profit associated to the Worker Provident Fund will stay unchanged.

The Minister additionally emphasised that taxation just isn’t levied on the funds held by members of the Staff’ Provident Fund. As an alternative, it’s imposed as a proportion of 14 % on the income generated from the fund’s investments.

Minister Manusha Nanayakkara made these remarks throughout his participation in a press convention held on Friday (September 15) on the Presidential Media Centre, on the theme of ‘Collective Path to a Secure Nation.’

Expressing his views additional he mentioned:

In step with agreements made with the Worldwide Financial Fund and our collectors, we have now efficiently accomplished the optimization of our international debt. Nonetheless, it’s essential that we additionally direct our consideration in direction of optimizing our home debt.

We initially resorted to international loans, recognizing that they’re funded by the taxpayers of these respective nations. Sadly, our challenges in repaying these loans led us to discover choices for native debt optimization. Subsequently, after reaching home debt optimization, we’re ready to undertake a restructuring of our international debt.

It’s value noting that a good portion of Sri Lanka’s loans are sourced from EPF-ETF funds, which has sparked some debate. Some have questioned why home credit score optimization measures weren’t utilized to banks. The rationale behind this choice is that banks will proceed to be topic to a 30 % tax charge, with no modifications in taxation for different main lenders.

As a authorities, we have now secured approval from each Parliament and the Cupboard and we have now made the choice to increase the 9 % return for one more 4 years. Which means that people will proceed to obtain an annual advantage of 9 % on their financial savings, with none further 14 % or 30 % taxes. It’s necessary to make clear some misconceptions on this matter.

The 14 % tax is solely utilized to income earned after investing cash within the Worker Provident Fund (EPF), guaranteeing that people with substantial financial savings within the financial institution as we speak, comparable to our 2.4 million staff, won’t face any hostile affect. When they’re able to withdraw their financial savings, they may also obtain the annual 9 % return.

Statements like “EPF/ETF Fund will likely be in peril except we restructure home debt” are largely rhetorical and lack a substantive plan. We belief that the Central Financial institution, because the custodian of the Worker Provident Fund, is an unbiased establishment and won’t be negatively affected. It’s necessary to emphasise that choices relating to the fund won’t be made via the Ministry of Labour.

Moreover, we’re planning to implement a digital information system at the start of the subsequent yr, which is able to strengthen our migrant labour coverage. Moreover, we have now accomplished the groundwork for digitising all information methods within the Labour Division and are actively working in direction of introducing an E-salary system.

(President’s Media)