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November Budget: Relief measures to be pruned down
The Government will be forced to prune down relief measures in the first budget to make up for a revenue loss of a staggering 1.3 trillion rupees, Treasury officials warned yesterday.
The November budget, now on the drawing boards at the Treasury, has taken note of the biggest chunk of the loss — Rs 490 billion — due to tax concessions given immediately after the presidential election in November, last year.
This prompted the Treasury to place a Rs 613 billion target for revenue collection by the Inland Revenue Department (IRD). since the IRD has not been able to meet the target,
it was lowered to Rs 490 billion, which amounts to the loss the state suffered due to revisions. A senior official said the collection so far had not exceeded Rs 290 billion, and it was a cause for concern.
Last year the IRD’s target was Rs 800 billion and it collected Rs 785 billion.
The Treasury has estimated that during this year, due to the COVID-19 pandemic, a further revenue loss of Rs 88 billion is expected while the concessions offered to the business sector have cost the Government another Rs 44 billion. In the excise sector, the revenue loss was Rs 115 billion while migrant workers’ remittances dropped by about Rs seven billion.
Treasury officials said next year’s budget was being prepared considering these losses which had reslulted in an increase in the budget deficit forcing the Government to raise funds by issuing Treasury Bill and Treasury Bonds, print money or look for other revenue measures.
“The Government will be forced to reduce relief measures, cut down expenses, and continue with import restrictions on some items such as vehicles,” a senior Treasury official said.