Biz community not convinced as Budget 2023 leaves out expenditure rationalisation

From left:   N. R. Gajendra,  D. R. S. Hapuarachchi, Thanuja Perera,  Tishan Subasinghe, Thilan Wijesinghe, Sharmila Jayasekara and Mahendra Jayasekara 
Pic by Kithsiri de Mel

• Points out Budget 2023 contains hardly any proposal to rationalise govt. spending despite the sharp increase in tax rates

By Shabiya Ali Ahlam
 Even though the Budget 2023 presented to parliament on Monday had given priority to boosting government revenue to aid the ailing economy, the country’s business community appears to be not convinced as it conveniently left the rationalisation of government expenditure.

The maiden full budget of President Ranil Wickremesinghe, where he presented the proposals in his capacity as the Finance Minister, mainly focused on improving government revenue that has depleted to dangerously low levels in recent years due to economic mismanagement. But, what was not on the list of 72 proposals was what measures would be taken to trim expenditure.

A post-budget seminar organised by the Institute of Chartered Accountants of Sri Lanka (CA) highlighted that the Budget 2023 has not addressed the main three sore thumbs—public sector salaries, interest costs, and defence—as they have been budgeted at high levels with no justification. 

“The budget talks a lot about increasing revenue, but reducing expenditure is only referred to in passing. Is there any seriousness in reducing expenditure?” questioned N. R. Gajendran, Founder/Senior Partner of Gajma, raising concerns on the budget during the panel discussion of the post-budget seminar. 

According to Budget 2023, a total expenditure of Rs.5,819 billion is estimated for 2023. In comparison to the budget 2022 (interim), the recurrent expenditure is increased from Rs.3,620 billion to Rs. 4,609 billion. Salaries and wages are increased from Rs.995 billion to Rs. 1,002 billion, and interest is increased to Rs. 2,193 billion from Rs. 1,379 billion.

While boosting tax revenue is essential to the betterment of the economy, the business community believes that the system cannot be trusted to use the revenue appropriately.

“In our tax system, we don’t see why we are giving money,” said Mahendra Jayasekara, Managing Director of Lanka Wall Tiles PLC implying the need for transparency.

“We don’t like being pickpocketed. If the taxpayers can be shown the purpose of this money, we will be supportive. We don’t see a purpose as we are not aware of how the tax revenue will be used. In the budget, the expenditure is not linked to national outcome, therefore we don’t see a vision for the future in this budget,” he added.