‘New taxes on the cards’ warning by top biz persons


The government will present its 2016 budget proposals today in parliament and the business community’s expectation is that the budget would help their businesses while contributing to the development of the country in the medium and long terms. But some top businessmen raised the possibility of new taxes being slapped on the public.

Finance Minister Ravi Karunanayake will present the budget today which would be giving relief to the middle class as well, Finance Ministry sources said.

The 2016 budget is likely to focus attention on promoting import substitution and curtailing the import of food items while providing more concessions to agricultural enterprises.

The country’s total borrowing requirement from both foreign and local sources for the year 2016 will be Rs 1,349 billion.

The revenue at the prevailing rates structure and foreign grants has been estimated to be around Rs 1,789 billion.

The expenditure provision covered in the appropriation bill has been estimated at Rs 1,941 billion, which consists of Rs 1,314 billion for recurrent expenditure and Rs 626 billion for capital expenditure.

In addition, provision has been made under special laws to service public debt and payments of widows and orphans pensions amounting to Rs 1,191 billion.

Top business personality and Director of John Keells Holdings Plc and DFCC Vardhana Bank Plc Nihal Fonseka commenting on the oncoming budget said that it should be a business friendly budget, ‘but everybody will have to pay a lot of taxes.’

Director/CEO Guardian Fund Management Limited Ruvini Fernando said that they are looking forward to medium to long term economic growth, which would encourage domestic and foreign investors to invest here to generate wealth in the country.

She also said that long term measures to strengthen economic development are needed, while there should also be a medium term strategy to reduce the cost of living to enhance the purchasing power of the people.

The president of the Stock Brokers Association of Sri Lanka Ravi Abeysuriya said that today’s budget should give priority to overhauling the tax system, tackling loss making state-owned-enterprises and improving labor market efficiency.

He also said that the government should have the political will and sincerity to restructure indispensible state entities to make them profit making entities and that those entities should be listed to enhance efficiency and effectiveness.

Abeysuriya also said that the government should introduce a simple taxation system by removing some existing taxes and by introducing few taxes that will help local and foreign investors to invest in the country.

“With the aim of containing the budget deficit to 5.5 to 6 percent of the GDP, the government plans to raise revenue via introducing new taxes and expanding the tax base, controlling state expenditure and by giving subsidies only for the needy and the poorest of the poor in the forth coming budget, he revealed.

(Source: The Island – By Hiran H.Senewiratne)