Economy

president Mahinda Rajapaksa presented the budget in Parliament this evening (Photo: Hiru News)

2014 Budget: Government asks banks and finance companies to merge

Thu, 21 November 2013 08:14

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(NIDAHASA News) Sri Lanka president asked banks and finance companies to merge in the wake of 2014 economic crisis predicted by many economists.

Presenting the budget for 2014 in parliament today (21) afternoon president Mahinda Rajapaksa said finance companies with subsidiary finance companies as well as banks having subsidiary finance companies will be asked to merge.

Rajapaksa is also the finance minister of country.

Main opposition United National Party (UNP) and Peoples Liberation Front (JVP) boycotted the budget presentation as a mark of protest against the failure to deliver promises given to the people.

"I propose that any finance company which is a subsidiary company owned by a main company be absorbed by the main company to consolidate their operations," Rajapaksa said.

"I also propose that banks, which have finance companies, to consolidate their operations," he added.

However government also plans to imply 2 percent "nation-building tax" on banks and financial institutions in coming year.

The nation-building tax is already assessed on some business sectors in Sri Lanka. Companies pay it based on their revenue. But president did not give details about when the financial sector will start paying the tax.

Meanwhile Rajapaksa said the deficit could be reduced to 5.2 percent of gross domestic product in 2014 from 5.8 percent this year.

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