Sri Lanka Parliament nod for 2023 budget with higher taxes, IMF reforms
COLOMBO – The second reading of the budget for 2023, that will introduce higher taxes and some basic reforms aimed at securing an International Monetary Fund (IMF) bailout package, was passed with a majority of 37 votes in the 225-member Parliament on Tuesday (22), with 121 MPs voting in favour and 84 voting against. One MP abstained from voting.
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, they are saying 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,” he said, adding, that the 2023 budget was aimed at confronting the challenges not to sell fairy tales. “That is exactly what this budget is about.”
The budget has aimed at increasing tax revenue by 69% to fund government spending in the crisis-hit economy. However, analysts have said the 2023 budget failed to address core issues on excess spending and articulate strong policies on restructuring loss-making state owned enterprises (SOEs).
The budget, expected to lay the foundation for a strong and modern economy that creates opportunities for the island nation’s youth, has aimed at increasing tax revenue by 69% to 3,130 billion rupees next year from this year’s 1,852 billion rupees, while bringing down the deficit to 7.9% in 2023 from this year’s revised 9.8%.
The high tax revenue target comes as millions of Sri Lankans face the impacts of the ongoing economic crisis – 66% inflation, job losses, and shrinking disposable income.