Summary of Budget 2024

President Ranil Wickremesinghe, serving as the Minister of Finance, presented the 2024 budget to Parliament under the theme "Prelude to a Bright Future." Here is a summary of the budget speech, including key tax proposals.

1.         Unveiling the 2024 budget, President Ranil Wickremesinghe asserted that Sri Lanka's economy, which had faced setbacks, successfully regained momentum in the previous year. Despite the collective efforts of hardworking individuals, there were others who attempted to hinder the nation's progress.

2.         Highlighting a pragmatic perspective, President Ranil Wickremesinghe emphasized that advancing a nation requires more than mere fairy tales. He underscored that the prolonged reliance on election promises by political parties has historically led to the economic bankruptcy of the country. Regrettably, some factions within the nation have yet to grasp the gravity of this situation.

3.         Presenting the 2024 budget, President Ranil Wickremesinghe urged a cessation of spreading political illusions. He called upon everyone to wholeheartedly commit to the country's betterment, emphasizing a shift from political considerations to a sincere focus on the nation's well-being.

4.         The President affirmed that persisting on the challenging course would lead to the creation of a more favorable economic environment. Reflecting on the past year, he expressed absolute confidence that the country is unequivocally on the correct trajectory.

5.         Unveiling the 2024 budget, President Wickremesinghe pledged his commitment to humbly identify the shortcomings encountered in the journey thus far and rectify them.

6.         During the presentation of the 2024 budget, President Ranil Wickremesinghe highlighted the prevention of hyperinflation, attributing the country's rescue to the successful reduction of the inflation rate to a single digit.

7.         Emphasizing the challenging nature of revitalizing a financially troubled nation, President Ranil Wickremesinghe cautioned against constructing ambitious projects solely for political gain. He underscored that pursuing dream palaces for short-term political objectives might risk pushing the country back into bankruptcy.

8.         Highlighting the success of the on-going journey, President Ranil Wickremesinghe attributed it to the government's economic reform program. He emphasized that this initiative has established a foundation for progress, steering clear of the economic challenges experienced in 2022.

9.         The President acknowledged the consistent borrowing from state banks to offset the losses incurred by financially struggling state entities like the Ceylon Electricity Board & the Ceylon Petroleum Corporation. He underscored the necessity of utilizing taxpayers' money to safeguard the stability of banks, preventing their weakening and potential collapse.

10.       The President highlighted the removal of legal obstacles hindering the integration of large-scale, low-cost renewable energy into the primary electricity grid. Additionally, he noted on-going efforts to formulate rules & regulations for restructuring the inefficient CEB into a more streamlined & efficient institution.

11.       President Ranil Wickremesinghe highlighted that the government allocates Rs. 383 billion monthly for three primary expenditures. This includes Rs. 93 billion for public sector salaries, Rs. 30 billion for public welfare encompassing insurance, medicines & pensions & Rs. 220 million to cover loan interest payments.

12.       During the presentation of the 2024 budget, President Ranil Wickremesinghe announced a significant reduction in the bank overdraft, decreasing from Rs. 900 billion in 2021 to Rs. 70 billion.

13.       The President emphasized that unless state income is increased from 10% to 15% of the GDP, the country faces the risk of economic challenges. He noted that addressing this issue goes beyond simple & appealing promises made by certain groups.

14.       President Ranil Wickremesinghe highlighted several proposals in the current year's budget aimed at addressing shortcomings, including long-standing issues like tax evasion. He expressed the belief that with increased state revenues, there would be room to offer more tax concessions compared to the present scenario.

15.       During the presentation of the 2024 budget, President Ranil Wickremesinghe noted that a substantial 35% of public expenditure is allocated to salaries for public employees.

16.       The President underscored that the losses incurred by public enterprises burden the public entirely. He criticized political groups that persist in placing this burden on the people under the guise of national resources, asserting that such actions are hindering the progress of the country.

17.       Highlighting that the allocation of the Nuwara Eliya Post Office to the tourism industry is not an isolated move but part of the broader Nuwara Eliya development plan, President Wickremesinghe stressed the importance of utilizing historic buildings for foreign exchange earning purposes, such as in the tourism industry. He cautioned that if timely action is not taken, other historic buildings, like the Galle Post Office, could face similar challenges.

18.       The President highlighted the failure of the political and economic concepts implemented in the country thus far. He urged a fresh perspective, emphasizing the need to re-evaluate both the political and economic systems with a new approach.

19.       In the presentation of the 2024 budget, Mr. Ranil Wickremesinghe advocated for the creation of a distinctive economic and political system. He emphasized the importance of incorporating insights from past experiences, global trends, and anticipating future challenges in shaping this unique system.

20.       During the presentation of the 2024 budget, the President noted that despite Sri Lanka experiencing a primary budget deficit of 5.7% of the gross domestic product in 2021, there was a turnaround & the country achieved a surplus in the first half of 2023.

21.       The President highlighted significant achievements, stating that inflation, which had reached 70% in September 2022, was successfully lowered to 1.5% by October of the same year. Additionally, he noted the successful replenishment of foreign exchange reserves, which had previously fallen to zero, reaching a notable amount of 3.5 billion US dollars.

22.       President Ranil Wickremesinghe emphasized that the current year's budget is pivotal, shaping the future of the country by establishing a new economic foundation aligned with contemporary international trends.

23.       Starting from January 2024, the current Cost of Living Allowance of Rs 7,800 for government employees will be augmented by an additional Rs 10,000.

24.       Government pensioners will receive a monthly Cost of Living Allowance increment of Rs 2,500, with a total allocation of Rs 386 billion earmarked for pensions in 2024.

25.       Provision for the payment of food and lodging allowances, with necessary adjustments, will be made for police officers engaged in remote duties.

26.       The government's disaster loan facility for employees, which faced restrictions last season, will be reinstated as before, effective from January 1, 2024.

27.       The allocation for social security programs, which amounted to Rs. 60 billion in previous years, has been tripled to Rs. 183 billion for the year 2024.

28.       Measures will be taken to make retroactive payments to eligible ‘Aswesuma’ beneficiaries in cases where the receipt of relief benefits is delayed.

29.       The Disability and Kidney Disease Allowance will see an increase of Rs. 2500.

30.       The monthly allowance for senior citizens will be raised to Rs. 3000.

31.       A biannual review of insurance beneficiaries will be conducted to promptly add new families to the beneficiary list.

32.       The allocation for 2024 will be increased to Rs. 205 billion for relief programs and allowances benefiting disabled individuals, kidney patients and the elderly.

33.       A dedicated provision of 10 billion rupees is earmarked to systematically continue the monthly allowance of 4500 rupees provided to pregnant mothers.

34.       A concessional credit facility of 30 billion rupees is established to fortify the upliftment program for small and medium enterprises that faced challenges in the previous season.

35.       A program will be launched to grant full private ownership of traditional farms to farmers who have lost their ancestral properties.

36.       The collection of rent from houses provided on an interest basis to urban low-income families will be entirely halted, and efforts will be made to transfer ownership of these houses to the occupants.

37.       An allocation of Rs. 4 billion is designated for the initial step of acquiring land rights for constructing houses for people residing in plantations.

38.       A provision of Rs.600 million is allocated to facilitate the swift completion of the Bim Saviya program.

39.       An allocation of 11,250 million rupees will be designated for the District Coordination Committees to recommence the Decentralized Budget Program.

40.       In 2024, a comprehensive ten-year multi-purpose rural and community development program will be launched, covering 89 Divisional Secretariats in hilly areas. A provision of 10 billion rupees is allocated for this initiative in the year 2024.

41.       A novel mechanism for project approval and the establishment of a state committee to review new projects have been introduced. No government funds will be allocated to any project outside of this system.

42.       The Budget for 2024 includes an increased allocation for capital expenditure, reaching Rs 1,260 billion, equivalent to 4% of the gross national product.

43.       An additional allocation of Rs. 55 billion will be directed towards completing projects that were temporarily halted due to the economic crisis.

44.       Starting in 2024, a specialized unit will be established in each ministry to ensure the timely fulfillment of development projects.

45.       A dedicated allocation of Rs. 10 billion is designated for the rehabilitation of deteriorated rural roads & Rs. 2000 million will be allocated for the restoration of roads and bridges damaged by natural disasters.

46.       Prioritizing water projects, decentralized funds, and foreign loan assistance will be deployed to address drinking water issues in every province of the country.

47.       A comprehensive series of education reforms will be enacted, leading to the establishment of the National Higher Education Council, the National Higher Education Commission & the National Skills Commission.

48.       Initiatives will be taken to ensure that every student who passes the Advanced Level Examination has the opportunity to pursue university education.

49.       Four new universities, including the Sitawaka University of Science and Technology, Kurunegala Institute of Technology University under the Kotelawala Defence University, University of Management Technology & International Climate Change University, will be established.

50.       Rules for the conversion of private higher education institutions into universities are adopted.

51.       An allocation of Rs 01 billion for the year 2024 is earmarked to establish the National University of Education by merging 19 colleges of education.

52.       A new University of Technology will be established in Kandy under the guidance of IIT University, Chennai, India.

53.       State universities will undergo an improvement program to align with the new era, starting with the University of Peradeniya. A provision of Rs. 500 million will be allocated for 2024.

54.       The Department of Allergy and Immunology at the University of Sri Jayawardenepura is elevated to the status of the National Institute of Allergy and Immunology, with an allocation of Rs. 40 million in 2024.

55.       Educational institutions recognized globally are permitted to establish universities in Sri Lanka, subject to a set of robust rules and regulations to regulate private universities.

56.       The interest-free loan facility for students in non-government universities will continue, and a concessional student loan system through commercial banks is proposed for implementation.

57.       The University Grants Commission and Tertiary and Vocational Education Commission will be merged to establish the National Higher Education Commission.

58.       The merging of institutions, including the Vocational Training Authority and National Apprenticeship and Industrial Training, will lead to the creation of the National Skills Commission.

59.       Vocational Education Institutions under the Central Government will be transferred to the Provincial Councils and Provincial Boards of Education will be established to enhance and modernize skill development.

60.       A fund for the improvement of technical professional skills will be established, with an additional allocation of Rs. 450 million for 2024, in addition to the current allocation.

61.       A collaborative training program with private institutions in the field of information technology will be initiated for graduates seeking employment, with an allocated provision of Rs. 750 million.

62.       Training programs will also be implemented for other skill shortage areas such as construction, nursing services & tourism.

63.       A sum of Rs. 150 million will be allocated to the Sri Lanka Foundation for the technical and physical modernization activities required to provide training courses for adults working in the public and private sectors to acquire new knowledge.

64.       A national program to expand English literacy in Sri Lanka will be prepared, with an initial allocation of Rs. 500 million to kick-start the program.

65.       The Suraksha Sisu Insurance Scheme will be re-implemented.

66.       Specific guidelines for the procurement of medicines will be issued and a separate agency for the same will be established.

67.       Steps will be taken to increase investment in medical and health research, including the initial phase of strengthening the infrastructure and laboratory facilities of the Medical Research Institute, with an allocation of Rs. 75 million.

68.       An allocation of Rs. 25 million for the year 2024 is earmarked to enhance the facilities of the National Drug Quality Research Laboratory.

69.       An allocation of Rs.300 million is allocated for establishing a cardiopulmonary resuscitation unit at the Badulla Teaching Hospital and for acquiring necessary equipment.

70.       The introduction of a promotion system that caters to both specialist doctors and graded doctors will be implemented.

71.       Postgraduate opportunities enhancing the professionalism of physicians will be expanded.

72.       Measures will be taken to strengthen and promote indigenous medicine.

73.       The Indigenous Medicine Division of the Ministry of Health and Ayurvedic Medicines Corporation will facilitate investors for medicinal plants with international demand.

74.       An allocation of Rs. 100 million will be made for establishing Ayurvedic treatment centres in tourist hotels and resorts in line with the Sri Lankan wellness concept. 

75.       Funds are designated for agricultural modernization projects, smallholder agribusiness partnership initiatives and crop diversification. A special plan will be initiated to nurture the fishing industry and apply modern technical knowledge to the sector. 

76.       Provincial Agriculture and Fisheries Development Boards will be established to support the development of the agriculture and fisheries sectors. 

77.       All agricultural service centres will be upgraded to agricultural modernization centres. Starting from the 2024 season, the government will allocate Rs. 2500 million to implement a joint program involving the private sector, farmers & agronomists.

78.       Existing legal impediments to conducting alternative cultivations on uncultivated lands will be removed.

79.       A total of 300,000 acres of land, owned by public enterprises, Mahaweli "A" and "B" Zones, Land Reform Commission, etc., will be allocated for large-scale agricultural activities.

80.       An allocation of Rs.500 million is designated to enhance fisheries in the North Sea, representing 35% of the country's total fish harvest.

81.       A sum of Rs. 200 million will be allocated for the development of the freshwater fishing industry.

82.       The responsibility for the rehabilitation of small tanks will be transferred to farmers' organizations in respective areas.

83.       Implementation of a counter-financing scheme to address the financial needs of stakeholders in the dairy value chain.

84.       A special program is initiated to increase milk production by 53% within 05 years, with the active participation of the private sector, effectively utilizing all farms under the National Livestock Development Board.

85.       A new program is launched to boost the construction sector, starting with the construction of the new building complex for the Ministry of Foreign Affairs as its pilot project.

86.       The construction industry is assigned the responsibility of building large houses and commercial complexes on estate lands in the Colombo city as part of a new program.

87.       A provision of  Rs.100 million is allocated to implement national branding efforts to reclaim Sri Lanka's status as a top tourist destination and an attractive investment hub.

88.       Formulation and implementation of an inclusive national logistics policy are initiated to leverage Sri Lanka's strategic location as a significant economic asset.

89.       Introduction of gender budgeting and related legislation, along with legislation for the empowerment of women.

90.       An allocation of Rs. 300 million is designated for a special program to economically empower the women and youth community engaged in the handloom industry.

91.       An allocation of Rs. 2000 million is made to meet the resettlement needs of homeless families in the North East regions. Additionally, an extra Rs. 500 million  will expedite the housing program and provide relief to families left without homes.

92.       An additional Rs.1,000 million is appropriated, in addition to the Rs.1,500 million already allocated in the Appropriation Act, to expedite the payment of compensation to the missing and victims of the internal conflict in the North & East.

93.       To address the drinking water problem in the Jaffna area, preliminary work on the Paaliaru water project will commence in the first half of 2024, with an allocation of Rs. 250 million .

94.       An allocation of Rs. 500 million is designated for the development of Pooneryn town.

95.       A state contribution of Rs.500 million is allocated to restart the construction of the Galle District Auditorium, which was halted halfway.

96.       An allocation of Rs. 250 million is made as a government contribution for the construction of a Bandarawela economic centre and the provision of necessary infrastructure.

97.       An additional Rs.2500 million will be allocated, in addition to the budget allocation already given, for the Lower Malwatu Oya project.

98.       An allocation of Rs.400 million is designated for initiating the establishment of the Maha Vihara University and the preliminary work of the construction program.

99.       An allocation of Rs. 100 million is allocated for the year 2024 in the program to establish a modern international Buddhist library in Anuradhapura.

100.     A Sri Lanka Buddhist Museum will be established in Kandy for research and cultural promotion activities focusing on the Buddhist civilization of Sri Lanka. A provision of  Rs.200 million will be allocated for the year 2024 for its construction.

101.     An allocation of Rs. 1.5 billion is earmarked in the budget for the development of school cricket in the island, providing necessary facilities to players at the provincial level, with priority given to schools and provinces with fewer facilities.

102.     The Motor Transport Department will be digitized in the year 2024. 

103.     Initiation of a pilot project to run 200 electric buses jointly with the Transport Board in the Western Province.

104.     The Kandy Multimodal Transport Centre project will start in January 2024 and Rs. 1.5 billion will be allocated for the development of its access roads.

105.     The complete renovation of the railway line from Anuradhapura to Mihintale will be completed by January 2024, with an allocation of Rs. 200 million & the private sector will also contribute to this initiative.

106.     It is proposed to utilize the revenue collected by the provincial councils as capital expenditure for the development of the province.

107.     The promotion of the export industry by the Provincial Councils is proposed & the limited powers of the Provincial Councils regarding industries under the Industrial Promotion Act No. 46 of 1990 will be amended. 

108.     Encourages self-financing of local governments.

109.     An allocation of Rs 700 million is designated for the establishment of the National Janasabha Secretariat.

110.     Rs. 02 billion will be allocated for 2024 for the preliminary work of the construction of Higurakgoda International Airport.

111.     It is proposed to allocate a provision of Rs. 01billion for the implementation of a joint youth development program by the Presidential Secretariat, coordinating programs focused on the development of youth conducted by all ministries & government institutions.

112.     The gem industry has not yet been able to achieve full capacity & for that, a general program should be prepared and implemented in the next 03 months.

113.     Establishment of a Presidential Task Force to work with Indian investors for greater Trincomalee area development, including large-scale agricultural programs and coastal tourism zones.

114.     Rs. 250 million will be allocated for the basic work of implementing the Ging Ganga water management program to prevent floods in the Galle district.

115.     This year's budget allocates Rs.3000 billion to implement the restructuring of foreign debt and to settle international sovereign bonds under the restructuring of foreign debt.

116.     Rs.450 billion allocated to support the capital improvement process in the banking system.

117.     To prevent the future deterioration of the financial condition of state banks, stricter rules regarding the appointment of chief officers and board members of state banks will be introduced.

118.     The Public Debt Management Act, Public Finance Management Act, Public Asset Management Act & State Enterprise Reform Law will be presented to Parliament in December or in the first quarter of 2024.

119.     A new land law is being introduced by the government along with new institutional changes to maximize the use of land for economic development.

120.     Implementation of public administration reforms.

121.     The new growth model in Sri Lanka is based on a digitalized social market economy with more efficient, equitable, green growth.

122.     Establishing the Sri Lanka Revenue Authority to increase the effectiveness of revenue administration by using international experience to boost government revenue.

123.     Expanding international markets for exports and entering into comprehensive trade agreements with key regional partners to create a competitive economy.

124.     As a basic step to improve global market relations, there will be a gradual removal of non-tariff import taxes, including import cess, port & airport tax over a period of 3-5 years.

125.     Reorganization of the National Trade Facilitation Committee headed by the Treasury Secretary, as well as modernization of customs laws.

126.     An amount of Rs. 200 million has been earmarked for the National Single Window to bring all the border management agencies into a single digital platform and to facilitate seamless and timely processing of trade-related regulatory documents.

127.     Rs.100 million will be allocated for the year 2024 to create a more convenient environment for investors, including automating the functions of all government agencies that provide services to investors.

128.     Establishment of the National Productivity Commission and an allocation of Rs.150 million for it.

129.     The establishment of a digital authority empowered with full control to provide necessary input and guidance for the digitization of the public sector is proposed. Additionally, a Technical Innovation Council will be formed to coordinate public sector expert institutions and civil society, fostering technological innovation. Simultaneously, a National Center for Artificial Intelligence is envisioned to drive economic and social transformation based on AI, with an allocation of 3 billion rupees for these three institutions.

130.     An allocation of 8 billion rupees is proposed for the formulation of a national research policy aimed at advancing research in Sri Lanka.

131.     A new tourism culture will be nurtured through the implementation of a long-term program under "Visit Sri Lanka" commencing in 2024.

132.     Strengthening Provincial Tourism Boards by entrusting them with the responsibility of meeting the basic needs of the tourism sector at the provincial level is planned. An allocation of Rs.750 million will be dedicated to the development of related facilities.

133.     To attract both local and foreign tourists, Rs.600 million will be allocated for the modernization of government resorts and the promotion of tourism.

134.     A three-year program for the development of the Pinnawala-Kithulgala tourism corridor will be initiated, with an allocation of Rs.750 million.

135.     The introduction of a simplified policy and regulatory framework is proposed to facilitate gig economy and e-commerce transactions. This framework will encompass areas such as the payment system, public revenue and employee welfare.

136.     The forward vision of the Sustainable Development Agenda will be underpinned by the climate resilience vision.

137.     The establishment of a Climate Change Commission is proposed.

138.     An allocation of Rs. 250 million is earmarked for a comprehensive program ensuring future food security, adequate food supply to consumers and providing necessary technical and facilities support to small and medium-scale processors engaged in the food production process.

The 2024 budget proposal outlines numerous essential initiatives aimed at enhancing tax administration and revising tax policies. Some key proposals are detailed below:

•          Amendments to the Inland Revenue Act No. 24 of 2017, including the introduction of special penal provisions for individuals failing to provide requested tax returns and information.

•          Implementation of stringent measures for tax audit documentation, with a time limit of 6 months for evidence within Sri Lanka and 9 months for other evidence from the date of the initial request. Failure to comply during the appeal hearing at the Tax Appeals Commission will result in disallowed submissions.

•          Mandatory submission of a copy of the Tax Payer Identification Number certificate in various scenarios, such as opening a current bank account, seeking building plan approval, registering or renewing a motor vehicle license and recording or settling land or land titles.

•          Introduction of a tax administration system for the Sri Lanka Excise Department, encompassing the implementation of an online licensing system for a more consumer-friendly and efficient regulatory environment, evaluation of safety features and the introduction of a new Excise Permit System.

•          Policy proposals for the Sri Lanka Excise Department in the budget include the establishment of Sri Lanka Standardization for maintaining liquor quality, adjusting excise license fees based on current demand, promoting investment in new alcohol products for foreign markets, permitting the sale of selected locally produced liquor in duty-free shops and implementing the Revenue Administration System for Excise Department (RASED) by October 2024.

•          For the Sri Lanka Customs Department, the budget proposes the development of risk management capabilities using modern software, the installation of a system to prevent incorrect invoicing and the identification of Key Performance Indicators (KPI) related to basic administrative functions.