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Verité Research unveils 10 budget proposals for revenue and growth

Published

3 years ago

2023/11/13

Pre-budget forum focuses on the pathway to revive Sri Lanka’s economy

Ahead of the presentation of the budget for 2024 to Parliament today (13 November), Verité Research has unveiled 10 Budget proposals designed to enhance revenue and revitalise growth in Sri Lanka.The proposals were announced at a forum titled ‘Budgeting for Revenue and Growth’ hosted by the think tank on Thursday (9), which facilitated a conversation on the pathway to revive Sri Lanka’s economy.

The forum featured presentations by Professor Mick Moore from the Institute of Development Studies – UK, Professor Shanta Devarajan from Georgetown University, Professor Udara Peiris from Oberlin College and Verité Research’s Executive Director Dr. Nishan de Mel, Research Director Subhashini Abeysinghe, Lead Economist Raj Prabu Rajakulendran, Lead Economist Mathisha Arangala and Lead Data Analyst Ashvin Perera.

In his opening remarks, Nishan de Mel underscored the importance of reducing interest costs while increasing revenue for sustainable economic recovery. He noted that the interest cost for 2024 projected in the upcoming Budget was LKR 234 billion higher than what was envisaged in the current IMF agreed economic recovery plan. He showed that Sri Lanka will continue to have the highest ratio in the world of interest cost to government revenue: currently above 70%, and remaining above 60% based on the projected 2024 budget.

The forum presented five proposals aimed at increasing revenue:

1.Increase the withholding tax rates from the existing 5% to 10%. – the proposal is expected to yield an additional LKR 90 billion.

2.Adopt the published rational formula for indexing cigarette taxes – the proposal is expected to add over LKR 35 billion.

3.Reverse sugar tax reduction and remove executive discretion on tax changes – the level of discretion allowed through the Special Commodity Levy Act, to the minister, led to what is commonly referred to as the ‘sugar scam’, immediately rectifying it (as had just taken place) can add over 25 billion.

4.Recover excess costs of Ceylon Petroleum Corporation through an increased tax on the whole industry rather than an increased price, above the internationally indexed formula, by the entity – the proposal will generate about LKR 25 billion in extra taxes collected from competing producers.

5.Implement the described method to estimate and collect property taxes – the proposal will initially increase tax collection by at least LKR 17 billion.

The next segment of the forum presented five proposals aimed at revitalising the economy:

1.Introduce state-funded maternity leave benefits (MLBs) – The private sector currently bears the full cost of maternity benefits, making it costlier to employ women. Research shows that state funded maternity leave reduces discrimination in recruitment, and boosts female labour force participation.

2.Protecting the poor with cash transfers and reforming state subsidies – better targeted transfers protects the vulnerable, and makes the allocation of subsidies more efficient, and effective.

3.Implementing trade facilitation targets — Sri Lanka has requested external assistance for 69% of the trade measures while least developed countries have, on average, asked for assistance for just 40% of the measures. Proposals were described to increase pro-active implementation.

4.Accede to the Madrid Protocol on trademark registration – this gives a much needed boost for exporters to go global with high-margin, value-added products, as it would Increase the speed and ease of international trademarks registration.

5.Actions to protect the Banking sector – Addressing banking sector risks requires joint actions from the central bank, the government and the International Monetary Fund (IMF) to implement proposals that include raising the deposit guarantee limit, establishing a Financial Stability Fund for liquidity injection during bank failures, and creating an asset management company for non-performing loans.

The segment on enhancing revenue was followed by a panel discussion featuring Nishan de Mel, Subhashini Abeysinghe, Professor Mick Moore and Professor Shanta Devarajan. The session was moderated by Inoshini Perera, Strategic Advisor to the Executive Director at Verité Research. The discussion highlighted the need to improve Sri Lanka’s risk perception to reduce its cost of borrowing, emphasising the need for better governance, including the restriction of discretionary powers in the executive arm of government. The panel also discussed the need to shift the composition of public expenditure on growth-promoting activities.

The segment on revitalising the economy was followed by a panel discussion that featured Nishan de Mel, Subhashini Abeysinghe, Professor Shanta Devarajan, Professor Udara Peiris and Country Managing Partner at Ernst and Young Sri Lanka Duminda Hulangamuwa. The session was moderated by Hemas Consumer Brands – Managing Director Sabrina Esufally. The panel emphasized the need for Sri Lanka to diversify its export sectors, reduce barriers to international trade, and seize economic opportunities in tourism, IT, ports and shipping infrastructure. The discussion also touched on the importance of addressing inefficiencies in tax collection and institutional processes.

Concluding the session, Nishan de Mel stressed the need for collective engagement and urgent attention to implement these proposals, among others, so that Sri Lanka might stave off a second debt episode of debt restructuring, and make the current recovery path effective and sustainable.

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Review of progress in reforms and modernisation of key state revenue-collecting institutions

Published

9 hours ago

2026/10/17

Priyan

A progress review meeting on reforms and modernisation initiatives at Sri Lanka’s key state revenue-collecting institutions was held on Thursday (15) at the Presidential Secretariat, chaired by Secretary to the President Dr Nandika Sanath Kumanayake, with the participation of representatives of the International Monetary Fund (IMF) and officials of the Revenue Administration, Reform and Modernisation Bureau (RARMB) of the Presidential Secretariat.

At the meeting, the IMF representatives commended the revenue collection efficiency of the Department of Inland Revenue, Sri Lanka Customs and the Department of Excise, the country’s three leading state revenue-collecting institutions. Extensive discussions were also held on the progress of the reform and modernisation programmes being implemented at these institutions.

Secretary to the President Dr Nandika Sanath Kumanayake outlined the progress achieved by the three institutions to date and the reforms planned for implementation in the future.

The IMF representatives also highlighted the importance of strengthening risk management, developing human resources and ensuring the efficient operation of computer systems at the respective institutions.

Senior Additional Secretary to the President Seevali Arukgoda also attended the meeting. The IMF was represented by Cindy Negus, Senior Economist in Revenue Administration for the Asia and Pacific, Europe, Middle East and Central Asia regions; Alison Lister, Revenue Administration Adviser; and Gregory Toppin, Resident Revenue Adviser in Sri Lanka. A group of senior officials from the Revenue Administration, Reform and Modernisation Bureau of the Presidential Secretariat also participated.

(President’s Media Division)

News

Cut power bills by 3-5%, don’t hike them, consumers demand

Published

15 hours ago

2026/10/17

Thilina Walpola

By Anuradha Hiripitiyage

Electricity tariffs should be reduced by between 3 and 5 percent instead of being increased by 2.88 percent in the fourth quarter, as proposed by the National System Operator (NSO), Electricity Consumers’ Association Secretary Sanjeewa Dhammika said.

Addressing a media briefing in Maradagahamula, Divulapitiya, Gampaha, yesterday (16), Dhammika said a proper assessment of electricity generation costs, including the contribution of hydropower, could justify a reduction in tariffs.

He said the NSO had sought approval from the Public Utilities Commission of Sri Lanka (PUCSL) for a 2.88 percent tariff increase, which was expected to generate an additional Rs. 4,438 million.

However, the Commission had indicated that an increase of only 1.46 percent was warranted, amounting to Rs. 2,245 million, he said, adding that even this increase was unnecessary.

Dhammika alleged that the proposed revision sought to pass on to electricity consumers the financial burden arising from the non-arrival of five coal shipments and failed tenders.

“The Government had said that the burden of coal-related losses would not be passed on to the public. It is therefore unjust to make consumers bear these costs,” he said.

He pointed out that the PUCSL had forecast that hydropower would account for 32.34 percent of total electricity generation in the coming quarter, while the cost of such generation would represent only 3.45 percent of the overall cost of electricity production.

Consumers should benefit from the lower cost of hydropower generation rather than bear the burden of more expensive thermal power generation, he said.

Dhammika also questioned the inclusion of Rs. 669 million in capacity charges that had not been approved by the PUCSL, as well as a further Rs. 1,069 million to repay loans relating to incomplete projects.

Including such charges in the proposed tariff revision was unjustifiable, he said.

The PUCSL has given the public until October 30 to submit their views on the proposed tariff revision.

Dhammika said the possibility of increased hydropower generation in the coming weeks, as reservoir levels rise, should also be taken into account when determining electricity tariffs.

He maintained that tariffs could be reduced by 3 to 5 percent if hydropower generation was properly assessed and coal-related losses and unapproved charges were excluded from the calculations.

He further claimed that electricity tariffs could be reduced by as much as 10 percent through the promotion of renewable energy and the effective use of solar power and battery storage systems.

The Electricity Consumers’ Association urged the Government to withdraw the proposed tariff increase, insisting that consumers should not be made to bear costs arising from coal supply problems and other disputed charges.

News

Asgiri Mahanayake calls for immediate release of Gnanasara Thera

Published

15 hours ago

2026/10/17

Thilina Walpola

Most Ven. Warakagoda Sri Gnanaratana Mahanayake Thera

By S.K. Samaranayake

Most Ven. Warakagoda Sri Gnanaratana Mahanayake Thera of the Asgiri Chapter has called for the immediate release of Ven. Galagodaaththe Gnanasara Thera, who is currently serving a prison sentence, following a court ruling.

The Asgiri Mahanayake made the appeal when a delegation of senior prison officials, including Assistant Commissioner of Prisons and Director of Operations Senaka Pallegedara, called on him on the 16th.

During the meeting, the prelate warned that the continued incarceration of Ven. Gnanasara Thera could lead to a volatile situation and cause public agitation.

Responding to the appeal, the prison officials informed the Mahanayake Thera that the authority to order the release of Ven. Gnanasara Thera did not rest with the Prisons Department but with the President.

Other senior prison officials, including Rajeev Srimal Silva, Sampath Warnakulasooriya and Mangala Welivita, were also present at the meeting.