Ravi pledges to rebuild economy

The Government has accepted the challenge of rebuilding the economy despite inheriting it when it had been hollowed out with debt, said Finance Minister Ravi Karunanayake. 

Speaking at the opening of the new Treasury building in the presence of President Maithripala Sirisena on Thursday he elaborated on the challenges before the Government.    

“The responsibility laid with the Ministry of Finance is to take forward the country towards rapid economic growth, utilising the limited resources of the country for the unlimited requirements of its people. Debt burden since independence to January 2005, which was Rupees one lakh eighty thousand crores, had been accumulated to rupees nine lackh eighty five thousand and eight hundred crores  when new government came to power on 15 January 2015,” he said. 

Citing examples from the massive debt challenge faced by the Government, the Minister pointed out that profit earned by the Srilankan Airlines, when it was taken back from Emirates was only Rs. 9,100 million but has now ballooned to “one lakh and seventy eight thousand and four hundred crores.” 

“This is only one debt, there are still more debts that have not been added to the balance sheet and we want to bring forward the economy without burdening the people of the country.” 

The Finance Minister charged that one cubic feet of the new Treasury building cost Rs. 31,000 but could have been constructed for less, as even five star hotels are constructed at about Rs. 12,000/- per cubic metre. 

“Rebuilding an economy cannot be done in one or two days. In the process for creating one million job opportunities we have confronted fresh challenges. If a country can be developed by shouting slogans or holding signs, we would have done the same, but that would only result in more negativity for the country,” he added. 

VAT hike deferred

The Government has decided to defer the increase in Value Added Tax (VAT) until further notice.

Under the 2016 Budget presented in November last year, the Government proposed to increase it to 15% with effect from 1 April 2016.

"The VAT rate, scope of the liability and provided exemption should be continued in accordance with the prevailing Act No 14 of 2002 and amendments thereto until further notice. Accordingly, the applicable VAT rate is 11% until further notice," the Commissioner General of Inland Revenue Kalyani Dahanayake said.