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Sri Lanka presents mini-budget with promise to tax ‘super rich’

COLOMBO (EconomyNext) – Sri Lanka’s Finance Minister Ravi Karunanayake is to present a mini-budget to give handouts to state workers, pensioners and tax the ‘super-rich’ while reducing autarkist taxes on foods.

Ministers of the Maithripala Sirisena had said that total state expenditure will be kept within the 2014 budget presented to parliament and that there will be a ‘re-allocation’ of expenditure.

Finance Minister Ravi Karunanayake told EconomyNext last week that he will tax the ‘super-rich’ while giving benefits to the poor.

It is not clear whether minister was referring to individuals or larger corporates.

Free trade in food and low inflation through tight monetary policy that gives a strong currency is the best non-deceptive benefit or ‘sahana’ that rulers can gve citizens, classical economists say.

There have been fears that deceptive handouts to sections of the poor, which are ultimately accommodated by the Central Bank could lead to currency weakness and inflation.

Since independence from British rule Sri Lanka has depreciated the currency from 4.76 to the US dollar to 132.00 mostly by giving deceptive subsidies, especially in fuel with printed money.

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