While making the case for tax hikes, State Minister of Finance Ranjith Siyambalapitiya revealed that nearly 4 million families, which make up nearly 58 percent of the country’s households are seeking financial assistance from the government under various social welfare schemes to survive from the on-going economic crisis.
Budget 2023 which is to be presented in parliament on November 14 is to focus on introducing welfare net for those families while providing maximum financial assistance and welfare facilities for them .
At the moment, there are 2,278,817 families who come under various social welfare schemes. In addition, there are 1,033,940 families who have applied for Samurdhi allowance. Altogether, 3,911,757 families accounting for 57.5 percent of the country’s households are seeking financial assistance to continue with their lives. It’s our responsibility to support them under the current strenuous environment,” Siyambalapitiya said, issuing a media statement
Finance Ministry’ is weighing up pros and cons of new revenue proposals at present in the perpetration to include higher taxes and more direct taxes prop posing wider reforms of State owned Enterprises (SOEs) in line with commitments made to the International Monetary Fund (IMF).in the Budget 2023.
The Ministry will kick start budgetary meetings for consultations on budget proposals and financial allocations with top ministry officials and stake holders soon.
President Ranil Wickremasighe who is also the Finance Minister of the country has issued relevant directions to officials of the s National Budget Department to accord priority in introducing safety nets to the vulnerable communities including the poor and the low income middle class hit by the economic crisis.
Some of the tax increases have already introduced with effect from April and or with immediate effect in accordance with Interim Budget 2023 which will also be extended in 2023 budget, informed sources asserted.
Government is set to present its budget for 2023 to parliament in mid-November and it is expected to include new direct taxes as one –off taxes proposed in budget 2022 may not be sustainable in bridging the budget deficits, a senior treasury ministry official said.
A key feature of the upcoming budget is the proposed new export tax on exporters including three main export crops, tea coconut and rubber hitherto exempted from tax.
Budget estimates for 2023 are based on Zero-Based Budging system and the proposed new taxes is not expected to impact overall business sentiment on a macro level, although certain industries will be affected he disclosed.
As per the Appropriation Bill for 2023, the total expenditure estimated for 2023 is a staggering Rs. 7.8 trillion as against Rs. 6.1 trillion for 2022.
Recurrent Expenditure has been estimated at Rs. 4.6 trillion, while total Capital Expenditure at Rs. 3.24 trillion. The gross borrowing requirement is estimated at Rs. 4.43 trillion.
Sri Lanka Government Revenues is projected to trend around Rs.2.77 trillion in 2023 compared, to estimated targeted revenue Rs.2.27 trillion in 2022, according to Finance Ministry econometric models and estimates.
The indirect tax proposals will be the extension of removal of various tax holidays granted under the Inland Revenue (Amendment) Act No.10 of 2021, Imposition of income tax on dividend payment by a resident company to a non-resident person, and removal of additional 100 percent deduction applicable for 2022/23 tax year granted for marketing and communication expenses
It is also planning to cut the budget deficit to 6.8 per cent of gross domestic product in 2023 from an expected 9.9 per cent in 2022.
The revenue proposals in budget 2023 are to be devised to increase government revenue to11.3 percent from 09 percent in 2022 and expenditure to 18.1 percent from 18.9 percent while reducing primary budget deficit to -01 percent from -04 percent
