Budget Highlights 2023

Following are highlights from the budget -2023 presented by President Ranil Wickremesinghe in Parliament today. 

*Propose to set up New Economic Zones in the Western Province, North-Western Province, Hambantota, and Trincomalee with a view to attracting foreign investments. 

 Rs. 300 million will be allocated for the propose of this programme. 

*Propose to establish a National Productivity Commission as an independent institution to investigate/study productivity issues based on quantitative and qualitative data and recommend trade adjustments schemes, to advise to the government on micro economic policies related to industries, and commerce and trade .Rs.100 million alloctated for the implementation of this proposal.

*A new agency will be set up in place of the Board of Investment, Export Development Board, Sri Lanka Export Credit Insurance Corporation, National Enterprise Development Authority etc. Allocation of Rs Rs. 100 million for the purpose.

*Propose to allocate Rs. 200 million to the Ministry of Investment Promotion to introduce the necessary reforms in respect of investment promotion.

*New projects/programs to be considered in the future should be submitted to the National Planning Department after conducting a feasibility study to include financial, economic and technical aspects by the line agency/Ministry.  

*Three maritime zones in the Eastern, Southern and Western provinces will be identified and developed the related infrastructure in those areas to develop tourism. Funds provided by the Tourism Development Fund. To initiate the process,  propose to allocate Rs. 50 million.

*Free internet facilities to 1,000 senior and junior secondary schools located in remote areas will be facilitated with the contribution of the Telecommunication Regulatory Commission, along with the concept of Corporate Social Responsibility of institutions that provide internet facilities and other private sector institutions.

*A Merit-based Admissions to State Universities: Propose to gradually increase the percentage of admissions to state universities on island wide merit basis from 40 percent to 50 percent with effective from the academic year 2023/2024. 

*Propose to establish postgraduate study programs for doctors in Peradeniya, Ruhuna and Jaffna universities as well. Hence, those universities should take necessary action to establish legal and procedural arrangement to implement this proposal. Accordingly, I propose to allocate Rs. 60 million to implement this proposal. 

*Propose to set up a Quality Assurance and Accreditation Board to ensure the quality and accreditation of degree courses conducted in universities. Under this, it is expected to ensure the quality of all degree courses. Accordingly, the Ministry of Minister in charge of higher education should take necessary steps to implement this proposal with the necessary legal provisions. For this purpose, I propose to allocate Rs. 100 million.

*Propose to provide 75 scholarships for the Advanced Level qualified students who receive the excellent results at the 2022 A-Level examination to follow degrees in foreign universities based on their chosen subject areas.

*In addition, I also propose to provide opportunities for 75 graduates with excellent degree performances at state universities from selected degree courses to follow post-graduate degrees in recognized foreign universities. 

*Propose to setup a new medical faculty under Uva-Wellassa University. Propose to allocate Rs. 200 million for the establishment of this medical faculty.

*An Institution to undertake and facilitate research on the history of Sri Lanka. Accordingly,  propose to allocate Rs. 50 million for this purpose.

*Presidential Commission on Taxation: Propose to establish a Presidential Commission on Taxation to study and make recommendations on the functioning, coordination and changes to be made in the tax structure, the institutions, procedures etc. 

*I propose to make it mandatory for all the government payments electronically (online) with effect from 01.03.2024 including cash grants to the respective recipients as well as the payments for obtaining services from various government agencies by the public. 

*Setting up of Data Protection Authority :As we develop our digital economy, there is a need to regulate the processing of personal data in order to safeguard privacy of our citizens from adverse impact of digitization. 

*Insurance coverage for Private Sector Employees : Propose to provide insurance coverage to provide a monthly allowance for a maximum of three months covering the period from the loss of employment and re-employment and to establish an insurance fund for this purpose. 

*Propose to provide similar health insurance to private sector employees as well.

*Electronic Scheme for Food Safety: It is necessary to maintain an up-to-date data system for planning and implementing activities relating to food safety. 

*Development of Inland Fisheries Industry : In order to increase the nutritional level of the public, the opportunity to obtain more fish products should be increased. Accordingly, propose to allocate Rs. 100 million to increase the capacity of the existing fish breeding centers to facilitate inland fisheries industry.

*Crude estimate suggests that revenue forgone due to the VAT exemptions granted to various sectors, including electricity, transport and fuel, is estimated to be more than 1 percent of GDP. Hence, it is proposed to remove certain exemptions after reviewing. Amendments to the VAT Act to remove certain exemptions will be made effective from 01 April 2023.

*It is noticed that some State-Owned Enterprises (SOEs) are still paying the PAYE / APIT tax liability of employees. This issue has also been questioned at the Committee on Public Enterprises (COPE) and by the Auditor General as well. Hence, I propose to stop such payments effective from 1 January 2023.

*Tax on Beedi sticks : In order to regularize the Beedi industry and deter people from Beedi consumption, I propose to impose a tax of Rs. 2 per Beedi stick.

*Phasing-out of Para Tariffs:  I am revising the current rates of Customs Import Duty from 0%, 10% and 15% to 0%, 15% and 20% to accommodate the proposed phasing out of para-tariffs / levies effective from January 01, 2023. 

*Non-Tax Revenue : Increase in non-tax revenue is also important in the fiscal consolidation process. Hence, I propose to increase fees and charges by 20 percent with effect from 2023. However, fees and charges that have already been increased in the years of 2020, 2021, and 2022 will not be revised with this proposal.

*Propose to increase fees levied by the Department of Immigration and Emigration on Passport, Visa and other charges. 

*Propose to appoint a Committee to examine and make recommendations on the royalty, rent, and other non-tax revenue charged and collected by the government organisations to the General Treasury.

*Establishment of a National Operations Centre (NOC) :It is high time to establish a National Operations Centre (NOC) under the Department of Project Management and Monitoring of the Ministry of Finance for tracking implementation issues of all development interventions of the country and resolve emerging issues on priority basis. 

*Allowing Armed Forces Personnel to Retire Early : I propose to allow armed forces personnel, other than special categories, to retire after 18 years of service. Measures will be taken to provide them with necessary training, enabling them to engage in productive economic activities.

 *Difficult situation faced  by public servants :Believe that a considerable relief can be given to the public servants and pensioners at the latter part of year 2023.

*Restructuring of SOEs :Initially, measures will be taken to restructure Sri Lankan Airlines, Sri Lanka Telecom, Colombo Hilton, Waters Edge and Sri Lanka Insurance Corporation (SLIC) along with its subsidiaries, the proceeds of which will be used to strengthen foreign exchange reserves of the country, and strengthening the Rupee.

*As a part of strengthening the balance sheets of selected SOEs, loans from China Exim Bank to the government which had earlier reclassified as debts of the CEB, SLPA and AASL will be recognized as central government debt by end of December 2022. Guaranteed foreign exchange debt of the CPC will also be recognized as central government debt by end of December 2022.

*New Financial Asset Management Companies Act :propose to introduce  newFinancial Asset Management Companies Act to enable banks and finance companies to separate and transfer their non-performing bad assets to an asset management company. 

*Establishment of the Microfinance and Credit Regulatory Authority (MCRA) : Propose to establish a Microfinance and Credit Regulatory Authority (MCRA) to ensure the protection of customers of microfinance and money lending businesses, while necessitating the reporting requirement to Credit Information Bureau of Sri Lanka (CRIB) by the regulated institutions.

*All welfare benefits payment schemes will be prepared based on a social registry system. 

*Relief for Samurdhi, Elderly, Differently-abled and Kidney allowances and more than 726,000 economically affected families, from the revised budget for 2022 will be extended another four months.

*Elderly/disabled/low-income /widows are a segment that should receive more attention economically. It is possible to strengthen this community economically by utilizing their skills and labor, and thereby obtain their contribution towards the development of the national economy. Propose to allocate Rs. 250 million for the year 2023 in this respect. 

*Improving Child Nutrition :Amidst the current economic crisis, an increase in acute malnutrition among children under 5 years of age is observed. Hence, I propose a sum of Rs. 500 million be provided to further strengthen the existing nutrition supplemental programmes in order to reduce health problems arising as a consequence thereof.

*Expansion of Coconut Cultivation :Current legal provisions allow fragmentation of less than 4 hectares of coconut lands, resulting in fragmentation of many fertile coconut lands which has severely impacted on annual coconut production. Therefore, I propose to amend the existing legal provisions and limit the fragmentation of coconut lands with less than one acre in extent.

*Establishing 10 Agro-entrepreneurship Villages :propose to establish 10 Agro-Entrepreneurship villages in order to encourage export-oriented products with the use of modern technology. I propose to allocate Rs. 250 million fr this purpose.

*Producing Triloka Wijayapathra : The possibilities of producing Triloka Wijayapathra purely for the prurpose of exports will be examined for which an expert committee will also be set up.

*Reducing Post-Harvest Crop Losses and Improve Storage :Propose to allocate Rs.150 million from the budget of the next year to develop required knowledge, technology and various infrastructure facilities to reduce post-harvest losses. I also propose to set up an export committee to obtain proposals, to present crop damages by animals.

*Enhancing Flood Protection Systems : In order to enhance the flood protection systems, an additional sum of Rs. 500 million will be allocated for the implementation of irrigation systems based on Ma Oya, Aththanagalu Oya and Bentara Ganga.

* Increasing Liquid Milk Production :propose to provide Rs. 100 million in 2023. I encourage the private sector to enhance their capacities to help this endeavor.

*International University for Climate Change :planning to establish an International University for climate change.

*Community Participation to Increase Forest Coverage: The importance of increasing forest coverage has been recognized in the context of the global warming trends. Accordingly, work related to the plan to restore 50,000 acres of degraded forest areas by 2027 should be expedited. Propose to allocate Rs. 50 million for this purpose. 

*New Laboratory for Excise Department :propose to establish a laboratory under the Excise Department to carry out tests relating to alcohol products. Hence, I propose to allocate Rs.100 million for setting up the laboratory.

*Establishing a Road Maintenance Fund :propose to establish a Road Maintenance Fund by charging an annual fee not less than Rs. 100 per vehicle when obtaining revenue licenses. The fund is expected to provide for all types of road maintenance annually. 

*Rehabilitation and Construction:  I propose to allocate Rs. 2,000 million in the year 2023 to rehabilitate the roads damaged by floods in order to reduce the sufferings undergone by the people. 

*Facilities for Production of Solar Energy / Electric Cars: Ppropose to remove Port and Airport Development Levy and Social Security Levy effective 01.01.2023.
*Also, necessary incentives will be provided to promote the use of electric cars locally as well as assembling them. Accordingly, Social Security Contribution Levy will be waived only for organizations that assemble motor vehicles and add at least 25% local value and produce the required parts locally.

* Retaining the Youth in Agriculture Industry : propose to select 240 youth who are currently unemployed representing each district of the island and to empower them as Agricultural Entrepreneurs. For this purpose, Rs. 120 million will be allocated.

*Under this scheme, a young woman entrepreneur can obtain a loan up to a maximum of Rs. 250,000.00, empowering at least 1,000 young women entrepreneurs at its initial stage. This scheme is expected to be implemented through the Regional Development Bank (RDB) covering all the districts and for that, as a start-up fund, Rs. 250 million will be allocated for 2023.

*Training of Youth for Foreign Employment :propose to allocate Rs. 50 million in 2023 to the National Youth Services Council to train youth for foreign employment opportunities.

*Safety Seal (Sticker) for Drinking Water Bottles: Introduce procedures to apply a safety seal (Sticker) to drinking water bottles at the production point. *Sanitary Facilities for Prisoners :Propose to allocate Rs 100 million for the purpose. The prison Department should consider this as a priority task.

* Upgrading Hospitals: propose to upgrade Badulla, Kurunegala and Polonnaruwa hospital as teaching hospitals.

*Paying Wards System in Government Hospitals :Propose to re-implement the Paying Wards System in government hospitals. 

*Appointment of Task Force to Monitor Budget Implementation : Propose to set up a Presidential Task Force to carry out monitoring functions to expedite implementation of all budget proposals.