The government was planning to reduce the tax burden as economic reforms continue to stabilize the economy, President Ranil Wickremesinghe said in his Policy Statement in Parliament today. The Presidents speech was loaded with facts ,figures and vision. The validity of what was presented needs to debated within the parliament and beyond within the next few days, said a senior parliament reporter.
“We are also revising the VAT percentage to further support economic growth,” he added.
Delivering the government’s Policy Statement in Parliament, he said the tax registration has substantially increased, with the number of registrations growing from 437,547 in 2022 to 1,000,029 by the end of 2023, representing a 130% increase.
Excerpts from the Police speech
“. Reflecting on the timeless wisdom of Lord Buddha’s sermon, ‘Attadeepa – Viharati’—be a lamp unto you—we find a profound lesson. Initiating the process of overcoming a crisis must begin within oneself. Throughout history, no crisis has been conquered solely through pointing fingers at others”.
“Inflation, which stood at a daunting 50.6 per cent last year, has dramatically decreased to a mere 6.4 per cent today”.
“Food inflation, previously at an alarming 54.4 per cent, has seen a remarkable decline to just 3.3 per cent”.
“The exchange rate has shown positive movement, with a dollar worth Rs. 362 in the past and now valued at Rs. 314.”
“Despite a 3.7 per cent budget primary deficit in 2022, we achieved a significant turnaround in 2023, achieving a primary budget surplus. This marks the sixth instance of Sri Lanka achieving such a surplus in the 76 years since independence.””
“The interest rate, which was a high 28 per cent in 2023, has notably dropped to 12 per cent.”
“The 52 main statutory bodies of the government, facing a loss of Rs. 745 billion by the end of 2022, turned a profit of Rs. 313 billion by September 2023.”
“. On April 12, 2022, Sri Lanka declared its inability to pay its debts, with foreign exchange reserves hitting zero. The current situation is vastly improved, with foreign exchange reserves standing at $4.4 billion by the end of December 2023.”
“The tourist arrivals for 2022 was 194,495, a figure that soared to 1,487,303 in 2023, with over 200,000 tourists arriving in January this year.”
“Despite a 7.8 per cent contraction in GDP by the close of 2022, our economic trajectory reversed. Experiencing six consecutive quarters of growth from 2022, the third quarter of 2023 marked a 1.6 per cent expansion”.
“Our economy, initially plummeted with unprecedented speed, has undergone a remarkable turnaround at rocket speed, resembling a V-shaped recovery igniting hope. It can be recognized as a significant achievement”.
“The British colonial government, through the Waste Lands Act in 1897, deprived people of their land rights, a grievance unaddressed by subsequent post-independence administrations. We have initiated the process of granting them land rights, which is set to benefit over two million people.”
“This year, Asvasuma is expected to benefit 2.4 million people, aiming to uplift the living standards of those at the lowest socioeconomic levels. The unprecedented financial subsidy accompanying this program stands as a historic milestone in our country. As a means of assistance to low-income individuals, each family will receive 20 kilos of rice during the festive season of this year.”
“As of August 2022, the President’s Fund was non-functional, leaving over 9,000 pending applications for medical aid. An additional 4,000 applications were received from August to December. We addressed the backlog, disbursing Rs. 915 million to 4,917 patients throughout 2023.”
As government revenue increases, we will take measures to increase benefits for the people accordingly…Indeed, VAT poses a burden for many, and we are not oblivious to this fact. We are systematically addressing this issue. In 2022, there were 437,547 registered tax payers, a number that surged to 1,000,029 by the end of 2023—an impressive 130 per cent increase.
“Continuing our economic reforms, we aim to alleviate the tax burden as the economy stabilizes. There is also room for a potential revision of the VAT percentage”.
“Projections from the IMF, World Bank, and Asian Development Bank suggest a potential 2% to 3% economic growth for this year, and our efforts are geared towards elevating this to 5% by 2025”.
“By September 2023 our total debt burden was US $ 91 billion. It will take a considerable period of time to settle this debt. In order to meet our debt, we need to source the funds locally. It is imperative that we generate this income; otherwise, we risk falling into the debt trap once again”.
“As a result of debt restructuring, we will be able to reduce the annual payment. Nevertheless, even under such a situation we will still have to pay around US$ 03 billion per year. We cannot continue to be paying in this manner. We need to create a balance between our income and expenditure. Our budget deficit is at an acute stage. This year government revenue stood at Rs. 4,127 billion and expenditure was Rs. 6,978 billion. Out of this Rs. 2,651 billion is for debt repayment. This clearly indicates our debt burden”.
“Tourism is a sector ripe for development, and we are actively working on enhancing both human and physical resources to attract more tourists, with the goal of reaching 5 million visitors annually”.
“We emphasize the need for a shift in our economic focus, which is currently centered around Colombo and the Western Province. Currently, 46 percent of the country’s economy is concentrated in the Western Province.”
“ A program has already been initiated to develop Trincomalee as an economic hub in collaboration with India”.
It’s crucial to recognize that the resolution to the economic crisis lies not in political but in economic and scientific solutions. Despite this, some political factions continue to advocate out-dated political remedies to gain popularity.
To advance, we must transition to a modern, robust economy. I will present the Economic Transformation Act to Parliament shortly, and relevant institutions have been established.
Progress cannot be achieved solely through political aspirations, un-kept promises, or election-focused slogans. Our commitment is to the on-going nation-building program, ensuring a prosperous future for the youth.
This transformation is a comprehensive and prolonged endeavour, not achievable in a brief period. As I previously mentioned, following this path could lead us to become a developed state by 2048. Quick fixes do not exist for crises, and achieving goals demand persistent effort.
The Bodhisattva’s journey to enlightenment serves as an analogy, emphasizing the dedication required for enduring success, involving millions of years of toil and facing continuous challenges even after attaining enlightenment. Reflecting on this, we need to charter our path in a patient and systematic manner.
In my earlier remarks, I referenced a sermon by the Lord Buddha. Many years after the Lord Buddha’s teachings, Confucius, the philosopher who lived in China around five hundred years before Christ, expressed the following sentiments.
To construct the world, we must first develop the nation. To develop the nation, we must start by building strong families. To establish strong families, we must begin by enhancing our personal lives. And to improve our personal lives, we must first cleanse our hearts.
Therefore, I urge everyone in this assembly to start by cleansing our hearts. To pave the way for future job opportunities and construct a better country for the youth, we must collectively choose the right path. It all begins with mending our hearts.
Now let me place two examples from east and west before you. According to 19th century Author and a social activist Helen Keller, ‘Alone we can do so little; together we can do so much’ and I am reminded of a poem penned by the esteemed Tamil poet Bharathi about his homeland. This poem has been translated into Sinhala by Professor Sunil Ariyaratne.
Thirty crore faces hath She, yet
She hath only one body and soul.
Eighteen spoken languages hath She, yet
She hath only one thought.
I urge each of you, why can’t we adopt such a perspective?