Treasury begins 2017 budget plans with thorough review
In the midst of Central Bank Governor Arjuna Mahendran ending a controversial tenure in office and uncertainty amongst several senior Finance Ministry officials under the present system, the Government is planning to strictly ban supplementary estimates next year. With the budget planning process to get underway, the Treasury Secretary has directed all Ministry Secretaries to finalise their 2017 budget and advised that no supplementary allocation will be given to them next year. The Secretary to the Ministry who is the chief accounting officer is to be held responsible for efficient management of the budgetary allocation made to the ministry, government sources said. They said the National Budget Department management team will commence the 2017 budget preparatory work this month.
The team has been entrusted with the daunting task of preparing a budget with no errors and amendments like the previous one to satisfy the ruling UNP and SLFP MPs, most importantly the masses and the International Monetary Fund. The Cabinet Committee on Economic Management (CCEM) has directed the Treasury Secretary Dr. R H S. Samaratunga to adopt a strict reviewing process when preparing the budget and that it should be very thorough. A performance efficiency management unit will be set up soon to ensure the efficiency of utilising government financial allocations. The main thrust of the budget 2017 is to reduce the budget deficit to 5.5 per cent of GDP, maintain the state investment level between 6–8 per cent of GDP, investment level of the economy at 30 per cent of GDP and achieve an economic growth beyond 6.5 per cent.
Sixteen amendments were made to the 2016 budget the main changes being the reintroduction of income tax on capital gains, increasing the rate of Value Added Tax (VAT), removing certain exemption on VAT and Nation Building Tax (NBT) thereby widening the tax base. Several budget estimates have gone haywire with the introduction of new amendments. Some of the revenue proposals made in the budget are yet to be implemented as the relevant bills have not been passed in parliament. Gazette notifications and circulars are still to be issued, several leading tax consultants and economic experts who wished to remain anonymous, told the Business Times.