FM proposes tax cuts, solutions to wage demands

According to the 2019 Appropriation Bill, state expenditure has been set at Rs.4,550 billion. Total government revenue is expected to be approximately Rs.2,390 billion this year.The Minister said country’s foreign reserves were depleted during the period adding the country lost close to Rs.1 billion in foreign exchange.

He added the rupee depreciated to its lowest level against the US dollar and tourist arrivals saw a drastic decline.

The Finance Minister said the government after coming into power gradually began restoring what was lost and continued to work towards regaining the trust and support of the international community.<

Through the 2019 Budget, the Finance Minister pledged to reduce several import duties.

The Minister also proposed to remove production tax imposed on small trucks.

The Moragahakanda Multipurpose project to be completed by 2020.

Minister of Finance Mangala Samaraweera also pledged to resolve the long-standing salary issues faced by plantation workers.

The 2019 Budget proposal was approved by the Cabinet of Ministers this morning..

Minister Akila Viraj Kariyawasam  said the proposal was approved when the Cabinet of Ministers convened this morning under the patronage of President Maithripala Sirisena.The Minister said the 2019 Budget proposal, ‘Focusing on Empowering the People and Nurturing the Poor’, was discussed at length during the Cabinet meeting.

The Ministry of Finance announced that the government through the 2019 Budget has allocated Rs.2,200 billion for debt servicing. According to the Ministry the amount is the highest a government in the history of Sri Lanka is compelled to bear for debt servicing. The recurrent expenditure includes Rs.1,425 billion while capital expenditure will be Rs.838 billion. According to the Appropriation Bill, the 2019 Budget deficit will be 4.8% of the GDP.

State revenue which was 11.5% of the GDP in 2014 is expected to be increased to 15% of the GDP this year. The Finance Ministry said the 2019 Budget is prepared under the Medium Term Fiscal Framework by adopting the performance based budgeting approach with the aim of strengthening the on-going fiscal consolidation programs.

The government is also aiming to achieve the target of increasing the state revenue to 17% and limiting the recurrent expenditure to 15 percent of the GDP in the year 2021.

The debate on the second reading of the 2019 Budget will commence tomorrow. Following six days of debating, the vote on the second reading is scheduled to be held on the 12th of March in Parliament.

The third reading of the Budget or the Committee Stage Debate will commence on the 13th of March. The final vote on the 2019 Budget proposal will be called on the 5th of April.