Deputy Minister explains limited tax concessions in 2025 Budget

Deputy Minister of Economic Development Prof. Anil Jayantha says that although the government’s intention was to provide tax concessions on essential goods, multiple limitations arose when presenting the 2025 Budget.

Speaking during TV Derana’s current affairs program “360°”, the Deputy Minister emphasized that not everything can be achieved in a single budget.

“We fully acknowledge that everything cannot be done in one budget. In our policy statement, we did not promise anything specific for the first budget. The first budget serves only one specific role in our broader journey. Policies are extensive, but actions must follow timelines. A vision does not necessarily require timelines,” he explained.

Commenting on the International Monetary Fund (IMF) program and taxation, he stated, “VAT is an indirect tax. We said it then, we say it today, and we will say it tomorrow – 18% VAT is not bearable. However, there are limitations to reducing it.”

“There is also an inherent limit to how much the economy can be constrained. It is currently stuck to a certain extent under the IMF program. We will work towards removing VAT in the future. However, we cannot overturn everything in the first budget at once. Our immediate goal is to remove VAT on essential items. If we were to operate without the IMF program, we could have done it in the first budget itself,” he added.