Economy

Finance Minister Ravi Karunanayake presenting the Budget (Photo: Nishan S. Priyantha/ Divaina)

Tax on corporations, relief for poor; new government's "robin hood" budget

Thu, 29 January 2015 21:28

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(NIDAHASA News) Sri Lanka's new government presented an interim budget with sweeping relief for poor they promised in election manifesto. Supersized taxes on Casinos and large corporations expected to cover the cost of unprecedented generous budget giveaways; a Robin-hood style take, according to local media, by a government led by a Prime accused by opposition for neo liberalist policies in his last administration.

Ravi Karunanayake, the finance minister of Ranil-Maithri interim government reduced the prices of 13 essential food items, domestic LP Gas and Kerosene dramatically while raising salaries of government servants by Rs. 10,000. Tax of 1 billion rupees on casinos, to be paid by April, expected to raise 5 billion rupees, while any company earning over Rs. 2000 million profits is 25% off its profit. Onetime tax of Rs. 250 million to be paid by mobile phone operators and telecommunication providers.

Rs. 1000 million onetime taxes imposed on television stations dedicated to sports, apparently targeting a television station run by incumbent Rajapaksa's son, which accused of shady deals, causing major financial losses to state television and sport administration bodies. Financial Minister also "exposed" many other economic and fiscal mismanagement of previous regime, warning true public debt is as high as 89% of GDP as opposed to 74% as previously claimed.

Karunanayake said, 2015 Budget expected a total revenue of Rs. 1,594 billion which consisted of Rs. 1,400 billion of tax revenue and Rs. 194 billion of non-tax revenue. Total expenditure and net lending was Rs. 2,990 billion of which recurrent expenditure was Rs. 1,465 billion and capital expenditure and net lending was Rs. 685 billion. Government plans to cut Budget difict to 521 billion or 4.6% of GDP, the lowest since 1977.

Minister vowed to review of all major capital projects and contracts awarded during past six months. His coalition, throughout the election campaign, accused previous regime for its overpriced and corrupt development projects resulted in an added financial burden to the people.

The interim government of Prime Minister Ranil Wickramasinghe and President Maithirpala Sirisena is expected to carry out massive reformations within a 100-day schedule, before parliament election in April.

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