Further tax hikes on business and high income earners may top Thu. budget

Sri Lanka’s government will likely focus on measures to boost revenue when it presents its 2005 budget next week, with a series of new taxes targeting businesses and high-income groups expected to be at the top of the list. Sri Lanka’s government will likely focus on measures to boost revenue when it presents its 2005 budget next week, with a series of new taxes targeting businesses and high-income groups expected to be at the top of the list. The government may also offer incentives to boost local industries and infrastructure development in an effort to boost economic growth.

“In a broad context we feel its going to be a people-friendly budget rather than an investment-friendly one,” said Eranjan Kulathunga, analyst at CT Smith Stock Brokers.

Minister of Finance Sarath Amunugama will present the Peoples’ Alliance government’s maiden budget to Parliament Nov. 18.

Taxes are likely to be imposed on strong growth areas such as telecommunications, capital gains on equities, credit card spending and property development, say analysts.

“The tax net is expected to be widened to more profitable areas. We feel the government will consider imposing a ‘wealth tax’ on vehicles, property, mobile p