Hasitha Premaratne

Chief Strategy Officer
Group Finance Director
Brandix Lanka

IMF impacts and taxation

This interim budget predominantly covered the bulk of arrangements that were set out in the staff level agreement (SLA) with the IMF – these proposals are by and large articulated in the budget.

The confirmation of the SLA was announced a few days after the interim budget was read in parliament, which means that the authorities had access to what was in the staff level agreement by the time the budget was read. The 2022 Interim Budget attempts to make a start on implementing some of the proposals in the SLA with a particular focus on the principles.

In the short term, tax increases are to be brought in and certain expenditure allocations are to be scrapped to address the fiscal deficit. It attempts to look at certain reforms to address loss making state enterprises to ensure that state coffers will not be pressurised to fund such losses; it’s a platform to get on with the proposals in the IMF staff level agreement.

So in that context, Budget 2023 shouldn’t introduce significant changes to tax rates and the regime that is spelled out in the interim budget, though it may probably elaborate on some of the provisions and look at how we need to take them forward to 2023.

Budget 2023 shouldn’t introduce significant changes to tax rates and the regime that is spelled out in the interim budget