Fuel, tobacco and cigarettes taxes up in Budget 2023
Sri Lanka’s Budget 2023 will be unveiled by President and Finance Minister Ranil Wickremesinghe in Parliament tomorrow with measures to increase taxes on fuel, tobacco and alcohol to boost revenue while reviving an old cost of living allowance for public and private sector workers to cushion rising living costs.
Increasing tobacco and alcohol taxation will raise government revenue without affecting economic growth. Budget 2023 is likely to introduce a model of indexation which automatically links tobacco tax rises with the size of the economy and inflation.
There are around 4 million families, which make up nearly 58 per cent of the country’s households and they are seeking financial assistance from the government under various social welfare schemes to survive from the ongoing economic crisis, Finance Ministry sources revealed.
The budget is to focus on introducing social security net for those families while providing relief for the low income earners and the middle class estimated to be between 15 to 20 percent of the country’s urban population facing economic hardships at present.
Accordingly, the theme of the budget is specified as “making a transformative change via minimum inputs’. It is aimed at strengthening the social security net for the poor and vulnerable communities as well as the middle income earners hit by high cost of living, official sources said.
In these circumstances, fiscal space has become extremely tight due to the drastic increase of government expenditure, severely limited government revenue and the problems by the government to borrow. In this context, preparation of the National Budget 2023 has become highly challenging, a senior Treasury official disclosed.
He added that the percentage of direct tax should be increased by 15 per cent to 35 per cent in the short term from the present rate of 20 per cent.
Therefore Budget 2023 will implement new tax reforms with the possibility of introducing the wealth tax which was in the pipeline for several years as well as new super gain tax, new capital gain tax, modified surcharge tax, land tax, personal property tax, corporate tax, and capital gains tax.
With the budget being designed under an IMF-framework (aimed at securing the bail-out package), focus would be also on restructuring a number of State-Owned Enterprises (SOEs) and a privatisation drive that hopes to raise foreign reserves by US$ 2-3 billion.
These include Ceylon Electricity Board, the Ceylon Petroleum Corporation including Sapugaskanda oil refinery, national carrier SriLankan Airlines and the Sri Lanka Transport Board.
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!