Sri Lanka parliament approves borrowing increase, taxes

sri lankan-parliament

Oct 21, 2015 (LBO) – Sri Lanka’s parliament has approved raising the ceiling on treasury bill borrowing by 400 billion rupees to finance a higher budget deficit.

The parliament also passed a series income, value added, nation building, gaming and broadcast taxes proposed in the last budget to raise government revenue by around 60 billion rupees.

The tax on telecoms was not taken up in the parliament.

The government’s earlier attempts to raise the T-bill limit and controversial taxes this year failed due to a lack of a parliamentary majority.

Finance Minister Ravi Karunanayake said this week that the budget deficit could rise to 6.8 percent of GDP from 5.5 to 6.0 percent estimated by the IMF.

Commenting on the taxes opposition MP Tharaka Balasuriya said: “A retrospective tax has no moral authority. It takes away a fundamental requirement in law, predictability. From an investor perspective, it’s a nightmare.”

“This Country, having endured a 30 year brutal war, had not imposed retrospective or a ‘Super gains’ tax during the course of the war, but the new government imposes such a law five years later, after the completion of the war, during a period of relative economic prosperity, in its maiden interim budget.”