Budget: No terrors to the small man-Ravi

Ceylon Finance Today: 'Budget 2016' to be presented in another 15 days' time on 20 November will hold no terrors to the small man, Finance Minister Ravi Karunanayake said.


Speaking at a tax seminar organized by the International Fiscal Association Sri Lanka branch yesterday, he however warned that tax dodgers will be roped in under a new computerized system launched by the Inland Revenue Department. "They will be dealt with justly, but firmly," he said.


"There will be no room for immunity or impunity to such persons under the new regime," the Minister said. He further said that under the new computerized system, every person, whether he be a taxpayer or not, will have a tax file.

Financial transactions made by individuals under this computerized system will be monitored, he said.
Black money which forms at least 30% to 40% of the economy, will be brought in to the formal economy, the minister said.
Karunanayake however said in a democratic system as practised by this government, it will be up to the people of this country to decide where they would want Sri Lanka to head to?
He further said that every US dollar that comes in to the country through the banking system will be accepted without any questions asked. The government wants to create a new Sri Lanka, that's what Budget 2020 aims for. He said that the government's vision for the country would be further explained by Premier Ranil Wickremesinghe who will spell out the government's economic vision to the island today.


"We want Sri Lanka to be a better investment destination than either Singapore, Dubai, Malaysia or Qatar," said Karunanayake.
He also said that the plethora of taxes, numbering some over 30 at present, will be streamlined and reduced. To a question as to whether the VAT would be replaced, allegedly due to the deleterious effects it has on the honest taxpayer, Karunanayake told the audience to "wait and see" as to what the outcome of Budget 2016 would be.
The minister said that efforts will be made to stop the drain of unskilled and semi-skilled resources from out of the country when there is a need for such persons within Sri Lanka, with the island suffering from a dearth of such resources.


There is no logic for a person to go out of the country, away from the family to labour for Rs 35,000-40,000 a month, when such an earning could be made in Sri Lanka, said Karunanayake.
In response to comments made by American billionaire Mark Mobius of Templeton Fund who invested US$ one billion in government securities in 2009, but is now allegedly withdrawing them, of the negative effects of retrospective taxes and the suspension of the US$ 1.4 billion Colombo Port City Project made by this government, the minister, referring to the high interest of some 11-12% earned by Mobius because of his local investments, said that the country can get along even without such investors.


He further said that the country inherited a debt of Rs 8.9 trillion from the previous regime. But this figure may expand when persons submit bills for contracts executed, given by the previous regime, bypassing the globally accepted tender regime.
A case of worry is that the revenue to GDP ratio which was at a high of 17.6% to GDP in the 1990s has since come down to 10.85%. Budget 2016 will endeavour to make revenue regain those high peaks without hurting the common man, he said.


Indirect taxes which contribute to 80% of tax revenue will be weeded out with direct taxation gaining ascendancy, said Karunanayake. Waste will be cut down to minimize recurrent expenditure, the minister said. Currently interest payments, salaries and pensions eat up all of revenue, he said.


The private sector will called upon to play their part in order to uplift growth to the 8% target, while an investor friendly climate, such as the liberalization of land laws will be made to encourage foreign investments, and at the same time ensuring that the rights of the locals would not be infringed upon, said Karunanayake.
http://www.ceylontoday.lk/22-108424-news-detail-budget-no-terrors-to-the-small-man-ravi.html

thanx for sharing

Thanks, lot of hints....

This ayahapalana govt increased the salaries of and pensions , creating a big disparity in earnings between govt servants and private sector workers/general public.. now they are saying no money to pay salaries. among the good things done by previous regime fertilizer subsidy is a useful one. it increased the productivity in agri and plantation sector. thats why we had bumper harvests during past years. now yahapalana is going to stop it by giving money.this may be a first step for stopping the subsidy. other thing is farmers instead of buying fertilizer for the money given, it can be used for consumption and liquor etc.

poor boy

This is one terrible mistake government is going to do as it seems...cutting agri subsidy...

Even Elpitiya Plantation acknowledged the benefit of agri subsidy...

http://forum.lankaninvestor.com/t6205-elpl-n0000-elpitiya-plantations-plc

isn't what he says is contradictory.(or am I understanding wrong)

at one time he says we need FDI, then he says we can go even without big foreign investor s.

and also heard about tax base expansion..

and most interestingly everyone is going to have file now....

FDI s this is one miracle many poor nations believe...

They are sold a concept that to develop you need FDIs..

They are sold a concept that FDIs flow to where you have democracy...

Just keep on believing them...