COLOMBO : Mahinda Yapa Abeywardana, Speaker of Parliament endorsed the certificate on the Appropriation Bill for the year 2024, the Value Added Tax (Amendment) and Finance Bills that werew passed in Parliament.
The national budget for the upcoming fiscal year was formulated and presented amidst the backdrop of a severe economic downturn, the most significant in our nation’s recorded history.
This year’s budget allocates significant increases in funding for government employee salaries, retirement benefits, poverty relief programs like Aswasuma, education, healthcare, and road infrastructure development.
Government employees will benefit from a 10,000 rupee increase in their living allowance, effective January 1st, 2024. While the policy takes effect in January, disbursement of the adjusted amount will begin in April.
The arrears from January to April will be due to government employees in installments from October next year.
Our nation currently operates under a program tied to the International Monetary Fund’s credit facility, necessitating adherence to stringent economic policies.
While this year’s budget presents diverse expenditure proposals, the primary challenge lies in securing adequate state revenue, as strongly highlighted by the International Monetary Fund’s December 12th staff report accompanying the second tranche disbursement.
“Even with revenue measures adopted so far,
government revenue remains substantially lower than in other emerging market and middle-income
countries”
The government’s primary revenue-generating proposal centers on an increase in the Value Added Tax (VAT) rate, from 15% to 18%, effective January 1st.
Additionally, nearly 100 previously exempt goods and services will be brought under the VAT umbrella.
