LIVE UPDATE: 2022 Budget Speech

 

Finance Minister's Full Budget Speech – 2022 by Ada Derana on Scribd

 

 

Highlights from the 2022 Budget Speech delivered by Finance Minister Basil Rajapaksa:

 

The Telecommunications Regulatory Commission of Sri Lanka issues licenses for telecommunication services, including, fixed phone operations, mobile phone operations, internet service providers, and satellite broadcasting operations. 

“As those obtaining these licenses make a substantial investment on telecommunication services, it is proposed to issue these licenses through an auction,” he said. 

Furthermore, he proposed to sell by auction the 5G frequencies to be included in the information technology field.

A license to be issued under goods and service tax for the designated areas to be developed as special zones for leisure activities.

According to the recommendations of this Commission, and without hindering the legal actions taken by the Attorney General, it is proposed to transfer to the Treasury the Rs. 8.5 billion that Perpetual Treasuries Private Limited has earned in violation of the Code of Conduct of the Central Bank of Sri Lanka.

In addition, it is proposed to expedite the implementation of the digital revenue collection system of the Excise Department and simplify the excise licensing process.

Finance Minister proposed to remove weaknesses in the digital revenue collection systems of the revenue collection bodies; Revenue Administration Management Information System (RAMIS) of the Department of Inland Revenue and Single Window System of the Sri Lanka Customs.

Minister Rajapaksa proposes to impose a fee on vehicles involved with accidents with the opportunity of reimbursing this fee from the insurance. Through this initiative, it is expected to reduce the number of motor vehicle accidents, he said. 

He also proposed to impose a fee on vehicle modification, alteration, and refurbishment; and, subject to an amnesty period to pay fines, legally register illegal motor cars and motor cycles, if they are in condition suitable for road. 

Similarly, he said it is proposed to release all vehicles seized at the Sri Lanka Customs owing to non-payment of applicable taxes and other reasons. Such release will be subject to the applicable taxes and fines. 

The Minister said it is expected to earn an additional income of Rs. 4 billion from these proposals.

The Finance Minister said a one-time tax surcharge of 25 percent is proposed to be imposed on persons or companies with taxable income over Rs.  2,000 million for the year of assessment 2020/2021. Rs.  100 billion is expected to be earned through this tax.

VAT on banks and financial service providers under supply of financial services by specified institutions is proposed to be increased to 18 percent from 15 percent. This tax should be paid monthly from 01 January 2022 to 31 December 2022. Furthermore, this tax should not be shifted to the customer. He said the government expects to earn Rs.  14 billion through this tax.

He proposed to increase Excise tax with immediate effect. An additional revenue of Rs. 25 billion is expected through this tax increase, he said. 

Finance Minister said that the tax on Cigarettes is proposed to be increased with immediate effect. As a result, the price of a cigarette will increase by Rs. 05. Government expects a revenue of Rs. 08 billion through this initiative, he said.

Minister Basil said the government will make every effort to reduce the budget deficit to 8.8% in 2022, 6.1% in 2024, and 4.8% in 2025. “We expect a balanced budget in 2028.” 

He said that in order to reduce the budget deficit measures for, solid expenditure management, increasing government revenue, and restructuring loss-making public enterprises are needed.

Rs. 15,000 allocated to provide relief packages to low-income earning families, says the Minister. 

Govt. has directed attention towards establishing small and medium scale industrial zones on a regional and district level, and thereby creating direct and indirect employment opportunities. Rs. 5,000 million to be allocated for this purpose. 

Rs. 500 million to be allocated for the Event Management sector to provide compensation for losses incurred during the pandemic. 

An additional Rs. 1,000 million to be allocated for the development and construction of fisheries harbors.

An additional Rs. 1,000 million to be allocated for the development of livestock sector. 

Another Rs. 5,000 million to be allocated to introduce new agri technology, in addition to the Rs. 17,005 already allocated through the Appropriation Bill. 

Rs. 4,000 million to be allocated to encourage farmers to use alternative for highly toxic chemical insecticides and pesticides. 

Consolidated budget of each MP to be increased by Rs. 5 million. Rs. 15 million to be allocated to each Member of Parliament for the development of their respective constituent areas. 

The Special Commodity levy to come into effect from January 01, 2022. 

elief to be provided to school van and school bus operators who were gravely affected and loss income during the Covid-19 pandemic. Rs 400 million to be allocated for this. 

Rs. 700 million to be allocated to provide relief to three-wheel drivers who lost income during the pandemic. 

Rs. 1,500 million to be allocated for the private bus operators who lost their income due to the Covid-19 pandemic.  

Finance Minister proposes utilizing methods such as Blockchain technology and to also move towards mobile banking through the digitalization of banks. Proposes the encouraging of establishing digital bank branches. 

“Our government is always dedicated to safeguard the farmers,” he said, adding that however a clear law has not been formulated for this. He proposed the drafting of the ‘Green Agricultural Development Act’ for this purpose. 

Sri Lanka to be developed as a hub for “Wellness Tourism” and the country will also direct attention towards avenues of tourism such as “Event Tourism”, “Destination Tourism” and providing tourists with “Home Stay”.

A “regulatory authority” to be established for three-wheelers, the Finance Minister said while adding that the service of three-wheelers for hire in the country has rapidly spread and that currently there is no mechanism to regulate them. 

A telecommunications network covering the entire country will be established immediately and all 10,155 schools in the country will be provided with Broadband internet connectivity using Fiber Optic technology.

Telecommunications connectivity and internet access shortcomings in the country were highlighted during the Covid-19 pandemic. 

Construction of new office buildings for the state institutions to be suspended for two years. 

Annual Warrant for state expenditure to be made a Quarterly Warrant in the future. 

Telecommunications connectivity and internet access shortcomings in the country were highlighted during the Covid-19 pandemic. 

Pension age of the state sector workers increased to 65 years – Finance Minister 

Fuel allowance for ministers and state officials to be reduced by 5 litres per month for each person.  

The minimum period a Member of Parliament must serve to obtain the pension extended from 05 years to 10 years. 

Telecommunication expenses of the government sector to be reduced by 25%

Finance Minister said that proposals and opinions of several organizations and individuals were obtained before preparing the budget proposals. 

After independence, all the government had failed to act with a clear vision with regard to the country’s foreign reserves. 

The “international drug mafia” is one of the biggest obstacles the country is facing, he said. 
 
He said today Sri Lanka is referred to as the “vaccinated nation in the Asia”. 

“We are a government that does what it says,” he said referring to the vaccination programme of the country. 

There is no more room for terrorism and extremism. Today Sri Lanka is one of the most peaceful countries in the world, Minister Basil Rajapaksa said. 

There is no other nation that loves the environment as this country, he said. 

He said that the government loss over Rs 500 billion in earning as a result of the Covid-19 pandemic. 

Basil Rajapaksa says that the Sri Lankan government is presenting this budget proposal at a time when the country and the entire world is facing a difficult period. 

Finance Minister commenced the 2022 Budget Speech. 

Finance Minister Basil Rajapaksa arrived in the Chamber and too his seat. 

Minister of Finance Basil Rajapaksa arrived in Parliament, a short while ago, for the Second Reading of the Appropriation Bill (Budget Speech) for the Fiscal Year 2022.

 

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The Minister of Finance will present the 2022 Budget proposal in the House at 2.00 p.m. today and deliver the budget speech.

This is the 76th budget of an independent Sri Lanka. It is also the second budget of the incumbent government and the first presented by Finance Minister Basil Rajapaksa.

The 2022 Appropriation Bill was introduced in Parliament by the Minister of Finance on October 07.