A new Budget proposal, that will increase income taxes, will be tabled in Parliament in the near future, Minister of Finance Ali Sabry revealed today.
Addressing today’s Parliament session, the Finance Minister said it was a historical mistake to reduce taxes in January 2020.
He also acknowledged a few key mistakes that had taken place resulting in severely affecting Sri Lanka’s economy.
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The Finance Minister also briefed the chamber on the current status of the country’s economy.
Following are 13 facts from the Finance Minister’s speech in Parliament:
- A new Budget proposal, that will increase income taxes, will be tabled in Parliament in the near future.
- The reduction in taxes severely affected the economy.
- The rupee should have been floated earlier and should have been allowed to gradually depreciate.
- Assistance from the International Monetary Fund (IMF) must have been obtained much earlier and during the much-needed crisis situations.
- The delay in rescheduling loans had largely cost the country’s economy.
- Sri Lanka’s usable foreign reserves are less than USD 50 million at present.
- The revenue from taxes has decreased from 24% to 8.6% at present.
- The total government revenue in 2021 was 1464 billion rupees, while government expenditure in 2021 was 3522 billion rupees.
- The expenditure was more than double the earnings, while 2748 billion rupees were allocated for recurring expenses.
- It will take Sri Lanka at least six months to enter an IMF programme.
- Discussions are underway to obtain bridging finance with several countries.
- Talks are in progress to increase the 400 mn USD aid from the World Bank to 700 mn USD.
- The World Bank, Asian Development Bank, and India are expected to assist in the procurement of essential drugs.
Full statement: Ministers Sabry’s Speech 04.05.2022 final English
(Courtesy NewsWire)
