Budget 2016 amendments worsen revenue targets
Amendments made so far to the good governance government’s 2016 budget is imperilling the country’s economy due to negative impact on 21 revenue proposals prepared by the Treasury to raise estimated revenue of Rs. 223 billion, economic experts and officials warned.
Several budget estimates have gone haywire with the introduction of new amendments. Treasury officials were being pressurised to review the whole budget and make necessary corrections and amendments. In the 2016 budget there were 114 expenditure proposals and the estimated expenditure in the table prepared by the Treasury was Rs.253.325 billion.
Changes made in the budget so far will also affect the expenditure estimates, a senior official told the Business times. The amendments made in the revenue proposals will incur a deduction of at least Rs. 70 to Rs.80 billion in the estimated revenue, he said adding that re-introduction of tax slashed vehicle permits and the reduction of vehicle emission test levy to Rs. 1500 from Rs 5000 will alone bring down the estimated revenue by at least Rs. 66 billion.
“The vehicle permit schemes have been politicized and misused and have created a huge revenue loss of over Rs.40 billion a year to the government,” Finance Minister Ravi Karunanayake said in his November 20 budget speech.
Amendments proposed to the Budget 2016 by Prime Minister Ranil Wickremesinghe will result in a Rs. 7 billion impact on the state revenue, he told Parliament on Tuesday. This was the first time that such a highest number of amendments had been made in a budget out of 69 budgets which have been presented in post independent era of the country, an economic expert said.
He noted that erroneous estimates, data and records are endangering the country’s economy with relation to 114 expenditure proposals mostly for handouts where financial allocations are to be made from Treasury votes for the medium term 2015-2017 provisions.
Budget 2016 introduces approximately nine new levies including Vehicle Valuation Certificate Fee and Fee for Unregistered Vehicles to be Registered, Emission Levy and Environmental Fee, etc, he said. Almost Rs. 74 billion is expected to be collected from levies and charges and this amount will be reduced to great extent by revising some of them, he added.
A not-so publicised revision has been made in the proposal on footwear import taxes on the intervention of the Finance Minister. The budget had reduced customs duty to zero per cent from Rs.100 per pair. During a discussion between representatives’ of footwear and leather product manufacturers, the Finance Minister had agreed to increase the Cess on footwear to protect local manufacturers bringing the total tax levy from importers to previous level. The gazette notification was to be amended to provide for a Cess of Rs 600 instead of Rs. 500 Cess and introducing a Cess of Rs.200 per pair of shoe uppers fulfilling the pledge given to local manufacturers by the Minister. But to the dismay of footwear manufacturers, the gazette imposed a Cess of Rs 200 per one kg instead of per pair.
Surprisingly in the past shoe uppers quantity has been taken as only pairs and how the pairs changed to kg was questionable, President of the Sri Lanka Foot ware and Leather products Manufacturing Association, P.G .D. Nimalasiri told the Business Times. “Some invincible hand was behind this change to tarnish the good and flexible attitude of Finance Minister Ravi Karunanayake,” he said adding that the present Minister of Industries is of no use as he is not interested or bothered about problems of local manufacturers.
This was a clear example to prove the acts of saboteurs in the Finance Ministry and other relevant ministries to disrupt budgetary implementation process and bring disrepute to Minister Karunanayake, he added.
Amendments in 2016 budget
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