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Achieving tax revenue over 11% a ‘daydream’ in contracting economy: Eran 

03 Nov 2022

By Imesh Ranasinghe  The Government’s plans for achieving a tax revenue of over 11% of the Gross Domestic Product (GDP) in 2023 from the current 8% will be a “daydream” in an economy that is contracting, Opposition MP Eran Wickramaratne said. Speaking to the media yesterday (2), he said that it is not possible to increase the tax revenue when the GDP growth of Sri Lanka is expected to contract by 8% and 3% in 2022 and 2023, respectively. He said that based on the projections, Sri Lanka will record a GDP growth by 2025 after stabilising the economy in 2024. “How can we actually increase revenue in a contracting economy? Their plan is not clear through the Appropriation Bill. I don't know why we agree to these things; we should talk and agree with the IMF on things we can do,” he added. In a statement released on Monday (31 October), State Minister of Finance Ranjith Siyambalapitiya said that the Government expects to improve the overall state income to 13% of the GDP compared to the current 8.5%; while expenditure is expected to increased by 29.2% to Rs. 7,885 billion, compared to the 2022 Budget. The highest Budget allocation (Rs. 572 billion) has been on social security, as 4 million families have sought relief from the Government. In the statement, the State Minister said that the Government expects the economy to contract by 8% in 2022 and 3% in 2023. However, Wickramaratne said that the Government will have to continue printing money to allocate funds for the vulnerable as 9.6 million have been pushed below the poverty line and take care of sectors such as education and health after bearing the losses of the State sector. According to the results of a recent study released by the University of Peradeniya, 9.6 million Sri Lankans have fallen below the poverty line in 2022 from 3 million in 2019.  


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