ECONOMYNEXT – Sri Lanka’s parliament passed 2023 budget that has proposed higher taxes and some basic reforms to content the International Monetary Fund (IMF) and secure $2.9 billion loan from the global lender to move out of the island nation’s unprecedented economic crisis.
The budget after seven days of debate was passed by 37 majority votes – 121 votes for against 84 – in the 225-member parliament. Many of the former ruling nationalist Sri Lanka Podujana Peramuna (SLPP) backed the budget presented by President Ranil Wickremesinghe, in his capacity as the finance minister on November 14.
“The oppositions doesn’t have any alternative solutions. When that is the case, now they are saying that the vision is correct, the way is correct, but these is an issue with the process,” Foreign Minister Ali Sabry said while concluding the budget debate from the government benches.
“This is not a budget that gives away candy or ice cream. Rather than presenting a budget that increases salary…and increasing the inflation, we have presented a realistic budget.”
“This is also a budget which is to confront the challenges not to sell fairy tales. That is exactly this budget is about.”
The budget has aimed at increasing tax revenue by 69 percent to fund government spending in the crisis-hit economy, but analysts have said the 2023 budget failed to address core issues on excess spending and articulate strong policies on restructuring loss0making state owned enterprises (SOEs).
The budget is expected to will lay the foundation for a strong and modern economy that creates opportunities for the island nation’s youth.
The budget has aimed at increasing tax revenue by 69 percent to 3,130 billion rupees next year from this year’s 1,852 billion rupees while bringing down the budget deficit to 7.9 percent in 2023 from this year’s revised 9.8 percent.
The high tax revenue target comes as millions of Sri Lankans face the impacts of the ongoing economic crisis – 66 percent inflation, job losses, and shrinking disposable income. (Colombo/Nov22/2022)