Budget 2016 to be presented in Parliament

Sri Lankan Finance Minister Ravi Karunanayake will seek to boost tax revenues and rationalise spending in the new government’s first full-year budget on Friday, but analysts see him showing little commitment to fiscal consolidation.

Meanwhile, government ministers have already hinted that concessions are to be provided through this budget including the reduction of prices of several goods for the benefit of the general public.

Sri Lanka will reduce its budget deficit marginally to 5.9 percent of gross domestic product from this year’s revised 6 percent, the 2016 official budget document showed on Friday. The current government is expected to present its economic policies.

Minister pointed out that not only has the government simplified the hitherto archaic and complicated tax structure but also reduced the applicable rate of income tax for corporates from 28% to an unbelievable 15% (for most companies) but also moved the tax free allowance Rs. 2.4 million. He also lifted tax on lands leased to foreigners.

According to a Finance Ministry statement, the total expenditure provision for 2016 without budget proposals to be introduced at the Second reading (November 20th) of the budget is estimated at Rs 3,138,353 million.

Minister of Finance Ravi Karunanayake will deliver the budget speech in Parliament tomorrow.

The Committee Stage debate will continue for 12 days from 7 December and the final vote at the Third Reading will be taken on 19 December.