• Latest
  • Trending
Ranil Wickremesinghe

Wickremesinghe hikes taxes to get desperately needed revenue

May 31, 2022
UNHRC periodic report on Lanka wants executive power clipped

UNHRC periodic report on Lanka wants executive power clipped

March 25, 2023
Water cut. Image credits - Walter Randlehoff / Unsplash

10 hour water cut in areas of Colombo today

March 25, 2023
Milinda Moragoda meets Indian Minister of Road Transport and Highways Gadkari

Milinda Moragoda meets Indian Minister of Road Transport and Highways Gadkari

March 25, 2023
The gran who couldn’t: Indu Balachandran’s latest book is for readers of all ages

The gran who couldn’t: Indu Balachandran’s latest book is for readers of all ages

March 25, 2023
Rahul Gandhi disqualified from parliamentary membership

Rahul Gandhi disqualified from parliamentary membership

March 25, 2023
Ramadan. Image credits - Andrew Lancaster / Unsplash

Ramadan 2023: Fasting hours and iftar times around the world

March 24, 2023
Exchange Rate

Foreign Currency Official Exchange Rates from Central Bank of Sri Lanka

March 24, 2023
The Central Bank of Sri Lanka (CBSL)

With IMF bailout, Sri Lanka will have healthy dollar reserves in 4 years: CBSL governor

March 24, 2023
Foreign Ministry spokesperson Wang Wenbin

China calls on Western lenders to ease debt pressure on developing countries

March 24, 2023
Pakistan High Commission celebrates National Day

Pakistan High Commission celebrates National Day

March 24, 2023
Rahul Gandhi gets two-year jail sentence in “Modi surname” case

Rahul Gandhi gets two-year jail sentence in “Modi surname” case

March 24, 2023
Argentine goalkeeper Leandro Requena scores an outrageous goal direct from a goal kick.

Goalkeeper scores from a goal kick – it could set the record for the longest range goal in history

March 23, 2023
  • About Us
  • Advertisements
  • Privacy Policy
  • Contact
Sunday, March 26, 2023
No Result
View All Result
NewsIn.Asia
  • Home
  • Around South Asia
    • All
    • Afghanistan
    • Bangladesh
    • Bhutan
    • China
    • India
    • Maldives
    • Myanmar
    • Nepal
    • Pakistan
    • Sri Lanka
    UNHRC periodic report on Lanka wants executive power clipped

    UNHRC periodic report on Lanka wants executive power clipped

    Water cut. Image credits - Walter Randlehoff / Unsplash

    10 hour water cut in areas of Colombo today

    Milinda Moragoda meets Indian Minister of Road Transport and Highways Gadkari

    Milinda Moragoda meets Indian Minister of Road Transport and Highways Gadkari

    The gran who couldn’t: Indu Balachandran’s latest book is for readers of all ages

    The gran who couldn’t: Indu Balachandran’s latest book is for readers of all ages

    Rahul Gandhi disqualified from parliamentary membership

    Rahul Gandhi disqualified from parliamentary membership

    Exchange Rate

    Foreign Currency Official Exchange Rates from Central Bank of Sri Lanka

    The Central Bank of Sri Lanka (CBSL)

    With IMF bailout, Sri Lanka will have healthy dollar reserves in 4 years: CBSL governor

    Foreign Ministry spokesperson Wang Wenbin

    China calls on Western lenders to ease debt pressure on developing countries

    Pakistan High Commission celebrates National Day

    Pakistan High Commission celebrates National Day

  • World
    • All
    • Japan
    • Russia
    • United Kingdom
    • United States
    Ramadan. Image credits - Andrew Lancaster / Unsplash

    Ramadan 2023: Fasting hours and iftar times around the world

    Foreign Ministry spokesperson Wang Wenbin

    China calls on Western lenders to ease debt pressure on developing countries

    Canada sees record population growth in 2022 from immigration

    Canada sees record population growth in 2022 from immigration

    Ukraine

    IMF staff reaches agreement with Ukraine for $15.6 bln program

    The Weeknd

    The Weeknd is the world’s most popular artist, Guinness World Records says

    Manchester United. Image credits - Javid Naderi / Unsplash

    Manchester United is for sale, who could buy the world-famous club?

    Whatsapp. Image credits - AARN GIRI / Unsplash

    WhatsApp for iOS gets text detection feature: What is it and how to use

    IMF

    Sri Lanka’s world-beating bonds pin hopes on IMF’s billions

    Putin announces partial mobilization for Russians, threatens enemies

    ICC judges issue arrest warrant for Russian President Vladimir Putin

  • Business
  • Politics
  • Sports
  • Entertainment
    • All
    • Books
    • Gaming
    • Movie
    • Music
    • Series
    The gran who couldn’t: Indu Balachandran’s latest book is for readers of all ages

    The gran who couldn’t: Indu Balachandran’s latest book is for readers of all ages

    The Weeknd

    The Weeknd is the world’s most popular artist, Guinness World Records says

    Naatu Naatu has millions of views on YouTube and is a viral sensation over social media

    Watch: Oscar winning song Naatu Naatu

    Naatu Naatu has millions of views on YouTube and is a viral sensation over social media

    Indian song ‘Naatu Naatu’ from ‘RRR’ wins Oscar award for best song

    Naatu Naatu has millions of views on YouTube and is a viral sensation over social media

    Naatu Naatu: The RRR song primed for Oscar history

    Keanu Reeves

    11 of the best films to watch in March

    Netflix. Image credits - Souvik Banerjee @rswebsols / Unsplash

    Netflix cuts prices for subscribers in more than 30 countries

    Backstreet Boys

    Backstreet Boys to perform in India after 13 years

    Roald Dahl books

    Roald Dahl books rewritten to remove language deemed offensive

  • Lifestyle
    • All
    • Fashion
    • Food
    • Health
    • Science
    • Travel
    Happy. Image credits - Lesly Juarez / Unsplash

    The world’s happiest countries for 2023

    Nepal. Image credits - Toomas Tartes / Unsplash

    Nepal bans solo trekkers throughout the country

    Air quality drops to ‘unhealthy’ level in Colombo

    Air quality drops to ‘unhealthy’ level in Colombo

    Scientists discover enzyme that turns air into electricity, providing a new clean source of energy

    Scientists discover enzyme that turns air into electricity, providing a new clean source of energy

    Toblerone chocolates

    Toblerone chocolates to lose “Swissness” criteria

    Significant increase of overweight and obese individuals in Sri Lanka

    Significant increase of overweight and obese individuals in Sri Lanka

    Vistara airlines to resume operations to Sri Lanka

    Vistara airlines to resume operations to Sri Lanka

    International airlines suspend some US flights over 5G uncertainty

    Saying no to inflight meals can help our planet

    Sri Lanka

    Where are 2023s tourists to Sri Lanka coming from?

    Hazardous health: Jaffna’s growing waste crisis

    Hazardous health: Jaffna’s growing waste crisis

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
  • Tech
    Whatsapp. Image credits - AARN GIRI / Unsplash

    WhatsApp for iOS gets text detection feature: What is it and how to use

    Nokia

    Nokia changes iconic logo to signal strategy shift

    Selena Gomez and Kylie Jenner

    Selena Gomez dethrones Kylie Jenner on Instagram

    Facebook. Image credits - Solen Feyissa @solenfeyissa

    Facebook & Instagram to test monthly subscription service priced at $11.99

    Whatsapp. Image credits - AARN GIRI / Unsplash

    New features introduced in Whatsapp’s latest update

    Microsoft has announced a new version of Bing

    Microsoft unveils new Bing with ChatGPT powers

    Trending Tags

    • Sillicon Valley
    • Climate Change
    • Election Results
    • Flat Earth
    • Golden Globes
    • MotoGP 2017
    • Mr. Robot
  • Coronavirus
  • Videos
  • Home
  • Around South Asia
    • All
    • Afghanistan
    • Bangladesh
    • Bhutan
    • China
    • India
    • Maldives
    • Myanmar
    • Nepal
    • Pakistan
    • Sri Lanka
    UNHRC periodic report on Lanka wants executive power clipped

    UNHRC periodic report on Lanka wants executive power clipped

    Water cut. Image credits - Walter Randlehoff / Unsplash

    10 hour water cut in areas of Colombo today

    Milinda Moragoda meets Indian Minister of Road Transport and Highways Gadkari

    Milinda Moragoda meets Indian Minister of Road Transport and Highways Gadkari

    The gran who couldn’t: Indu Balachandran’s latest book is for readers of all ages

    The gran who couldn’t: Indu Balachandran’s latest book is for readers of all ages

    Rahul Gandhi disqualified from parliamentary membership

    Rahul Gandhi disqualified from parliamentary membership

    Exchange Rate

    Foreign Currency Official Exchange Rates from Central Bank of Sri Lanka

    The Central Bank of Sri Lanka (CBSL)

    With IMF bailout, Sri Lanka will have healthy dollar reserves in 4 years: CBSL governor

    Foreign Ministry spokesperson Wang Wenbin

    China calls on Western lenders to ease debt pressure on developing countries

    Pakistan High Commission celebrates National Day

    Pakistan High Commission celebrates National Day

  • World
    • All
    • Japan
    • Russia
    • United Kingdom
    • United States
    Ramadan. Image credits - Andrew Lancaster / Unsplash

    Ramadan 2023: Fasting hours and iftar times around the world

    Foreign Ministry spokesperson Wang Wenbin

    China calls on Western lenders to ease debt pressure on developing countries

    Canada sees record population growth in 2022 from immigration

    Canada sees record population growth in 2022 from immigration

    Ukraine

    IMF staff reaches agreement with Ukraine for $15.6 bln program

    The Weeknd

    The Weeknd is the world’s most popular artist, Guinness World Records says

    Manchester United. Image credits - Javid Naderi / Unsplash

    Manchester United is for sale, who could buy the world-famous club?

    Whatsapp. Image credits - AARN GIRI / Unsplash

    WhatsApp for iOS gets text detection feature: What is it and how to use

    IMF

    Sri Lanka’s world-beating bonds pin hopes on IMF’s billions

    Putin announces partial mobilization for Russians, threatens enemies

    ICC judges issue arrest warrant for Russian President Vladimir Putin

  • Business
  • Politics
  • Sports
  • Entertainment
    • All
    • Books
    • Gaming
    • Movie
    • Music
    • Series
    The gran who couldn’t: Indu Balachandran’s latest book is for readers of all ages

    The gran who couldn’t: Indu Balachandran’s latest book is for readers of all ages

    The Weeknd

    The Weeknd is the world’s most popular artist, Guinness World Records says

    Naatu Naatu has millions of views on YouTube and is a viral sensation over social media

    Watch: Oscar winning song Naatu Naatu

    Naatu Naatu has millions of views on YouTube and is a viral sensation over social media

    Indian song ‘Naatu Naatu’ from ‘RRR’ wins Oscar award for best song

    Naatu Naatu has millions of views on YouTube and is a viral sensation over social media

    Naatu Naatu: The RRR song primed for Oscar history

    Keanu Reeves

    11 of the best films to watch in March

    Netflix. Image credits - Souvik Banerjee @rswebsols / Unsplash

    Netflix cuts prices for subscribers in more than 30 countries

    Backstreet Boys

    Backstreet Boys to perform in India after 13 years

    Roald Dahl books

    Roald Dahl books rewritten to remove language deemed offensive

  • Lifestyle
    • All
    • Fashion
    • Food
    • Health
    • Science
    • Travel
    Happy. Image credits - Lesly Juarez / Unsplash

    The world’s happiest countries for 2023

    Nepal. Image credits - Toomas Tartes / Unsplash

    Nepal bans solo trekkers throughout the country

    Air quality drops to ‘unhealthy’ level in Colombo

    Air quality drops to ‘unhealthy’ level in Colombo

    Scientists discover enzyme that turns air into electricity, providing a new clean source of energy

    Scientists discover enzyme that turns air into electricity, providing a new clean source of energy

    Toblerone chocolates

    Toblerone chocolates to lose “Swissness” criteria

    Significant increase of overweight and obese individuals in Sri Lanka

    Significant increase of overweight and obese individuals in Sri Lanka

    Vistara airlines to resume operations to Sri Lanka

    Vistara airlines to resume operations to Sri Lanka

    International airlines suspend some US flights over 5G uncertainty

    Saying no to inflight meals can help our planet

    Sri Lanka

    Where are 2023s tourists to Sri Lanka coming from?

    Hazardous health: Jaffna’s growing waste crisis

    Hazardous health: Jaffna’s growing waste crisis

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
  • Tech
    Whatsapp. Image credits - AARN GIRI / Unsplash

    WhatsApp for iOS gets text detection feature: What is it and how to use

    Nokia

    Nokia changes iconic logo to signal strategy shift

    Selena Gomez and Kylie Jenner

    Selena Gomez dethrones Kylie Jenner on Instagram

    Facebook. Image credits - Solen Feyissa @solenfeyissa

    Facebook & Instagram to test monthly subscription service priced at $11.99

    Whatsapp. Image credits - AARN GIRI / Unsplash

    New features introduced in Whatsapp’s latest update

    Microsoft has announced a new version of Bing

    Microsoft unveils new Bing with ChatGPT powers

    Trending Tags

    • Sillicon Valley
    • Climate Change
    • Election Results
    • Flat Earth
    • Golden Globes
    • MotoGP 2017
    • Mr. Robot
  • Coronavirus
  • Videos
NewsIn.Asia
No Result
View All Result
Home Economy

Wickremesinghe hikes taxes to get desperately needed revenue

Editor by Editor
May 31, 2022
in Economy, Sri Lanka, Top Story
Reading Time: 6 mins read
18 0
A A
Ranil Wickremesinghe

Ranil Wickremesinghe

Share on WhatsApp

Colombo, May 31:  The Sri Lanka Prime Minister and Minister of Finance Ranil Wickremesinghe has announced hikes in taxes to get more revenue for tiding over the ongoing economic crisis.

VAT will go up from 8% to 12% and the telecom levy will go up from 11.5% to 15%.

A statement from the PM’s office said that the following will be done:

ADVERTISEMENT

Decreasing VAT threshold from Rs. 300 million per annum to Rs. 120 million per annum effective from October 1, 2022. Reviewing VAT exemption schedule and removal of unproductive exemptions based on the economic benefits. Removal of the VAT exemption on Condominium Residential Apartments effective from October 1, 2022.

For similar articles, join our Telegram channel for the latest updates. – click here

Removal of zero percent VAT rate granted on the supply of services by a hotel, guest house, restaurant or other similar businesses providing similar services, registered with the Sri Lanka Tourism Development Authority, if sixty per centum of the total value of the inputs are sourced from local supplies/sources and imposition of 12 percent tax rate on the same effective from October 1, 2022.

Making any other consequential amendments due to the above proposals.

“The VAT rate was reduced from 15 percent to 8 percent with effect from December 1, 2019 and the threshold for registration of VAT was increased from Rs. 3 million per quarter or Rs. 12 million per annum to Rs. 75 million per quarter or Rs. 300 million per annum effective from January 1, 2020. Due to the above reforms coupled with the impact of COVID-19, VAT revenue declined by 47 percent to Rs. 233.8 billion in 2020 from Rs. 443.9 billion in 2019,” the statement said.

The telecommunication levy, meanwhile, was reduced from 15 percent to 11.25 percent effective from December 01, 2019, which led to a decrease in revenue by 28 percent to 13.1 billion rupees in 2020 from 18.3 billion rupees in 2019, the PM’s statement said, explaining the increase.

Income tax reforms have also been proposed, along with changes to betting and gaming levies.

Meanwhile, the following amendments have been proposed to the Fiscal Management (Responsibility) Act, No. 3 of 2003:-

Inclusion of a provision where exceeding the Treasury Guarantee limit is permitted in the case where there is an exceptional depreciation or other unforeseen circumstances.

Inclusion of an escape clause to ensure flexibility that the Government may deviate from the operational target(s) or fiscal rule(s) due to unforeseen circumstances. This would eliminate the need to continually amend the Act each time when a target is breached.

The cabinet of ministers have approved the proposed reforms, the statement said.

The PM’s statement noted that the low tax regime introduced in late 2019 following the election of President Gotabaya Rajapaksa caused an annual loss of around LKR 600 billion – 800 billion in tax revenue to state coffers.

“Therefore, these reforms are now being looked as policies that led to a significant loss of government revenue, partly due to the spread of COVID-19 pandemic in 2020/2021 and related developments, which affected the revenue generation process, ultimately resulting in the lowest revenue to GDP ratio in the region. The revenue to GDP ratio has declined to 9.1 percent in 2020 from 12.7 percent in 2019 and further deteriorated to 8.7 percent in 2021. This is significantly lower than the average revenue ratio of around 25 percent of GDP in emerging market and developing economies.

“The low tax regime, the impact of the COVID-19 pandemic on revenue mobilisation, together with the pandemic relief measures, widened the budget deficit significantly to 11.1 percent of GDP in 2020 and 12.2 percent of GDP in 2021 from 9.6 percent of GDP in 2019. This has led to an increase in the government debt to GDP ratio to 100.6 percent in 2020 and 104.6 percent in 2021 from 86.9 percent in 2019,” it said.

Sri Lanka introduced a low tax regime in late 2019. The reforms included the reduction of tax rates of Value Added Tax (VAT), Personal Income Tax (PIT) and Corporate Income Tax (CIT), and narrowing tax bases of VAT and PIT, while introducing a plethora of tax incentives, such as tax exemptions for agriculture and Information Technology (IT) and enabled services, tax deductions and tax holidays. This caused an annual loss of around LKR 600 billion – 800 billion in tax revenue to state coffers.

Therefore, these reforms are now being looked as policies that led to a significant loss of government revenue, partly due to the spread of COVID-19 pandemic in 2020/2021 and related developments, which affected the revenue generation process, ultimately resulting in the lowest revenue to GDP ratio in the region. The revenue to GDP ratio has declined to 9.1 percent in 2020 from 12.7 percent in 2019 and further deteriorated to 8.7 percent in 2021. This is significantly lower than the average revenue ratio of around 25 percent of GDP in emerging market and developing economies. 

The low tax regime, the impact of the COVID-19 pandemic on revenue mobilization, together with the pandemic relief measures, widened the budget deficit significantly to 11.1 percent of GDP in 2020 and 12.2 percent of GDP in 2021 from 9.6 percent of GDP in 2019. This has led to an increase in the government debt to GDP ratio to 100.6 percent in 2020 and 104.6 percent in 2021 from 86.9 percent in 2019.

This fiscal imbalance has significant adverse spillover effects over the economy. Sri Lanka’s economic outlook remains vulnerable with the unprecedented inflationary pressures, persistently large fiscal and balance of payment financing needs, large debt overhang and critically low level of reserves and pressures on the exchange rate. Economic growth will be adversely affected by the foreign currency shortage and ensuing economic conditions prevailing in the country as well as loss of business and investor confidence due to credit rating downgrades.

The loss of access to international markets and the relatively low amount of other foreign exchange inflows to the government have created substantial issues in financing the government budget deficit. In 2020 and 2021, the entire budget deficit was financed through domestic sources as there were net repayments to the foreign sources. Of the domestic sources to finance the budget deficit, the majority was obtained from the banking sources, particularly from the Central Bank of Sri Lanka, given the unavailability of sufficient amount of net financing in the domestic non-bank sources. Continuous significant amount of Central Bank monetary financing has adversely affected the economy, particularly with the significant pressure on the inflation and the exchange rate.

At present, the situation has aggravated to a very critical level where the General Treasury has to increasingly obtain Central Bank financing to make the government expenditures, including a substantial part of interest, salaries and wages, pensions and Samurdhi payments etc. This is clearly unsustainable and hence the implementation of a strong fiscal consolidation plan is imperative through revenue enhancement as well as expenditure rationalization measures in 2022 and beyond to ensure macroeconomic stability to support the medium to long-term economic growth objectives of the country.

In the above background, tax reforms are proposed to be implemented over the immediate and near term.

The Cabinet of Ministers has approved a proposal by Prime Minister and Finance Minister Ranil Wickremesinghe to amend five Act of Parliament to boost Government revenue The five are – Inland Revenue Act – VAT Act – Telecommunication Levy Act – Betting & Gaming Levy Act – Fiscal Management Act. The move is in line with the new interim government pronouncements that State revenue has to be considerably increased to meet essential expenditures amidst the economic crisis. The Government has announced a relief Budget as an interim measure. Cabinet on Monday also approved to present a Rs. 695 billion supplementary budget to Parliament, the PM’s office said.

END

Subscribe to our Telegram channel for the latest updates from around the world

Related Posts

UNHRC periodic report on Lanka wants executive power clipped
Governance

UNHRC periodic report on Lanka wants executive power clipped

March 25, 2023
Water cut. Image credits - Walter Randlehoff / Unsplash
Around South Asia

10 hour water cut in areas of Colombo today

March 25, 2023
Milinda Moragoda meets Indian Minister of Road Transport and Highways Gadkari
Development news

Milinda Moragoda meets Indian Minister of Road Transport and Highways Gadkari

March 25, 2023
Rahul Gandhi disqualified from parliamentary membership
India

Rahul Gandhi disqualified from parliamentary membership

March 25, 2023
Exchange Rate
Around South Asia

Foreign Currency Official Exchange Rates from Central Bank of Sri Lanka

March 24, 2023
The Central Bank of Sri Lanka (CBSL)
Around South Asia

With IMF bailout, Sri Lanka will have healthy dollar reserves in 4 years: CBSL governor

March 24, 2023
  • Electricity

    Power cut schedule for today in Sri Lanka: Uninterrupted power supply

    60146 shares
    Share 24081 Tweet 15027
  • Registration open for National Fuel Pass

    6636 shares
    Share 2692 Tweet 1644
  • Foreign Currency Official Exchange Rates from Central Bank of Sri Lanka

    1794 shares
    Share 724 Tweet 446
  • WATCH : Yohani’s first live performance in India

    789 shares
    Share 328 Tweet 192
  • Power interruption schedule released: Check your area power cut time

    742 shares
    Share 320 Tweet 176
  • About Us
  • Advertisements
  • Privacy Policy
  • Contact

© 2022 All rights reserved.

No Result
View All Result
  • Home
  • Around South Asia
    • Afghanistan
    • Bangladesh
    • Bhutan
    • China
    • India
    • Maldives
    • Myanmar
    • Nepal
    • Pakistan
    • Sri Lanka
  • Around The World
  • Breaking News
  • Business
    • Exchange
  • Climate Change
  • Governance
    • Crime
    • Diplomacy
    • Defense
    • Human Rights
    • Politics
    • Strategic Affairs
  • Lifestyle
    • Books
    • Entertainment
      • Arts
      • Cinema
      • Gaming
      • Music
      • Movie
      • Series
      • TV
    • Health
    • Fashion
    • Food
    • Travel
  • Culture
    • Ethnicity
    • Gender
  • Development news
  • Economy
  • Education
  • Environment
  • Coronavirus
  • History
  • National
  • Offbeat
    • Media
    • Music and arts across South Asia
  • Recommended
    • Headlines
    • Highlights
    • Top Picture
    • Top Story
  • Religion
  • Science
  • Sports
    • Football
    • Cricket
      • LPL
      • IPL
    • Tennis
    • Formula 1
    • NBA
  • Tech
    • Instagram
  • United Nations
  • Weather
  • World
    • Japan
    • Russia
    • United States
  • Videos

© 2022 All rights reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

eskisehir escort -

https://www.vudols.com/

- Sağlık Personeli - mersin escort - Antalya korsan taksi