- Maithripala-Ranil interim Govt. taxes the rich and vice to give sweeping relief for poor
- Gets generous with highest ever pay hike for public servants in two phases; urges private sector follow suit; PAYE threshold upped
- Mini-Budget gets ‘100-day revolution’ populist tag and covers poorest of the poor, farmers, pensioners, migrant workers, disabled war heroes among others
- Makes 13 essential imported food items, domestic LPG, Kerosene and mobile phone reloads cheaper
- Higher allocation for health and education
- Far-reaching one time payments and additional taxes on those who have enjoyed super gains, high profits in the recent past
- Finance Minister exposes economic and fiscal mismanagement of MR regime; warns true public debt is as high as 89% of GDP as opposed to 74% as previously claimed
- Plans to cut Budget deficit to 38-year low of 4.4% of GDP
- Review of all major capital projects/contracts awarded during past six months
- Lankan expats to be tapped for $ 10 via five-year special Bond Issue carrying a fixed interest rate of 4.5%
By Ashwin Hemmathagama Our Lobby Correspondent
The Government yesterday released what could be classified as a Robin Hood Budget which gave rise to unexpected relief and benefits.
High net-worth individuals as well as business entities enjoying benefits under the Mahinda Chinthana were slapped with sweeping restrictions and regulations as well as taxes to shore up revenue.
The 19th Finance Minister of Sri Lanka, Ravi Karunanayake, exchanging his usual European attire for national garb, said he was laying the foundation to create a new Sri Lanka devoid of misdeeds which would in turn lead to a “Maithri Palanaya.”
“Today’s statement will be a shining example of how a people-friendly Government creates opportunities to serve the people. At this juncture, I call upon all Sri Lankans to show solidarity with our Government and rally together for a change to create a better tomorrow commencing with the 100-day revolution. Power is temporary. Official positions are also temporary. As trustees of our voting public, our duty is to honourably serve the nation. We must not forget that we are servants of the people and it is our bounden duty to be of service,” Karunanayake said.
The recent victory of President Maithripala Sirisena, who engineered the move which saw the United National Party establish a Government under the leadership of Prime Minister Ranil Wickremesinghe, has brought smiles to many faces, Karunanayake stated.
“The smiles portray freedom, liberty and courage. It is refreshing, the release from the bonds of family rule and crony nepotism. Honourable Speaker, Honourable Members of the Parliament, before I conclude I am sure that the smiles will be wider. They deserve the plethora of benefits that are to be announced. And they also deserve a future of sustenance, enjoyment and good life. All are enjoying the serene breeze of change, a change for the better and a change to be cherished. A rule of compassion - a Maithri Palanaya,” he said.
According to the Finance Minister, Budget 2015 expected a total revenue of Rs. 1,594 billion which consisted of Rs. 1,400 billion of tax revenue and Rs. 194 billion of non-tax revenue. Total expenditure and net lending was Rs. 2,990 billion of which recurrent expenditure was Rs. 1,465 billion and capital expenditure and net lending was Rs. 685 billion. The estimated deficit in Budget 2015 was Rs. 521 billion or 4.6% of GDP, the lowest since 1977.
“I should say that this deficit is related only to Government revenue and expenditure. However, we have repeatedly shown to this Parliament and discussed even outsideParliament over the past several years that this deficit does not reflect the real burden ofthe public finances of the country today as it does not take into account the many budgetary operations of the Government. This façade of duplicity has to be removed and the actual position has to be made known to the Honourable Members of Parliament and the public. We do not intend to mislead either the Honourable Members of Parliament or the general public in our endeavour to ensure good governance,” Karunanayake said.
The Government plans to raise $ 10 billion from Sri Lankan expatriates through a special five-year Government bond which will carry a fixed interest rate of 4.5%.
One step forward and two steps back!
Step forward: The present 38 taxes and levies will be reduced to 20 and our intention is to get this implemented as soon as possible - Finance Minister Ravi Karunanayake in Mini-Budget 2015.
Two steps back: Several new taxes were added yesterday including a Mansion Tax, Migrating Tax and Super Gain Tax apart from a plethora of new levies.