Economic expert MP Dr. Harsha de Silva dissected Budget 2024, emphasising three critical pillars for Sri Lanka›s recovery: eradicating corruption, creating economic opportunities, and ensuring social equity.
The seasoned politician delved into each point, offering a pragmatic assessment and proposing viable alternatives.
He underscored the need for robust measures to combat corruption across various sectors.
He criticised the absence of tangible anti-corruption initiatives, citing examples like the cricket scandal, sugar tax scam, and fraudulent activities in the liquor industry.
The SJB parliamentarian questioned the Government’s inaction and proposed the implementation of the Stolen Assets Recovery (STAR) program and the establishment of an independent prosecutor’s office, as outlined in the SJB blueprint.
Moving to the second point, de Silva highlighted the importance of creating economic opportunities for youth in rural areas, empowering entrepreneurs, supporting small and medium businesses, and ensuring fair prices for farmers.
He argued that eradicating corruption alone is insufficient and advocated for a broader economic vision.
In his exploration of the third key aspect, the SJB MP shed light on the complexities of fiscal consolidation and expenditure reduction, emphasising the profound implications for social equity.
Despite the President’s focal point on revenue-based fiscal consolidation, concerns surfaced regarding the comparatively meagre attention given to reducing overall expenditure.
He acknowledged challenges in curtailing expenditure, particularly in vital sectors like Health and Education, allocated a modest 1.7% of GDP. However, he expressed reservations about funding directed to loss-making SOEs, exemplified by SriLankan Airlines, which sought Rs. 110 billion to settle liabilities to Ceylon Petroleum Corporation (CPC) recently.
This raises concerns about fairness in comparison to the total expected revenue from PAYE of Rs. 100 billion annually or essential needs like children’s uniforms, a significant 27 times less.
Criticism was directed toward the extension of tax breaks, citing the Strategic Development Projects (SDP) Act and recent Supreme Court rulings on preferential tax treatment for associates, resulting in substantial losses to the Treasury.
However, concerns were articulated regarding proposed tax changes, especially their disproportionate impact on citizens through heightened consumption taxes. For example, the VAT hike from 15 to 18% and the removal of VAT exemptions for items like petrol, diesel, gas, and fertiliser could drive inflation up and consumption down.
He called for fairness and transparency advocating for the disclosure of tax changes to Parliament, ensuring public awareness amid talks of Government giveaways.
De Silva proposed the Government implement his revised PAYE tax structure, significantly reducing the burden on professionals while still achieving the expected income. The MP lamented the lack of response from the Ministry of Finance to their
In a dramatic climax, de Silva concluded that the proposed tax burden is excessively high, risking a decline in consumption, business failures, and an exodus of professionals from Sri Lanka.