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Due to a recent black money law, a number of Swiss and other European banks had begun asking Indian and Sri Lankan clients to disclose their accounts to tax authorities back home. In this situation, Sri Lankan and Indians with money in these countries could repatriate them to Sri Lanka, Karunanayake said in October. In terms of raising revenue through the upcoming budget, he said: "Areas that were unknowingly or unprofessionally neglected will be looked at.
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But it won't have a cost impact on the people.
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" It will be a capital-oriented budget aiming at higher revenue than recurrent expenditure. The government would look for a policy shift to change the ratio between indirect and direct taxes from the current 80-20 percentage to 60–40 by the year 2020, he added. Expenditure had escalated by 70 billion rupees this year with railway and water works projects of the previous government.
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This will lead to a widened budget deficit of 6.9 percent of GDP this year. GDP growth could be expected at 6.2 to 6.5 percent next year, he added. With the possibility of a rate hike in the US, Karunanayake said the US had tried to raise rates five times this year and they too were in election mode.
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"Fait accompli. Even if we don't want to we have to, so why waste time on a headache we can't control," he said. "We should call their bluff and rates will go down, and that will be helpful for us," he said. Commenting on the national airline, Karunanayake said "it has been badly run, and needs to have professionals running it.
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We will ensure that." "No layoffs at all, but the culture has to change." In terms of the currency, Karunanayake said he was confident the rupee would strengthen against the dollar, despite recent pressure on the external front which had led to its depreciation.