Daily Lankadeepa E-Paper

Government faces dilemma in raising budget 2022 taxes

By Bandula Sirimanna

Sri Lanka’s public debt crisis will become critical in 2022 and beyond leading towards a worse economic downturn in the next three years, economists said analysing the statistics of government borrowings.

The government’s debt-GDP ratio is expected to rise to 108 percent by 2022 from 101 percent by the end of 2020, Finance Ministry provisional data revealed.

Public debt sustainability involves macroeconomic variables and in finding a solution it is necessary to tackle the issue at the macro level, they pointed out.

Finance Minister Basil Rajapaksa has reiterated that Sri Lanka is confident of not defaulting on its debts and measures will be taken to enhance its foreign exchange reserves. He said that the government will reduce its budget deficit to around 8.8 percent of GDP in 2022 while the deficit target for 2021 was revised to 11.1 percent.

D r. Nandasiri Keembiya h e t t i , S e n i o r Lecturer of Ru h u n a University said that 70 per

The government will have to go for more bank borrowings while printing money to provide loan facilities in rupees and dollars to meet local and foreign borrowings, he opined

cent of the tax revenue proposed in the budget cannot be collected under the present circumstances due to financial difficulties faced by the private sector.

The government will have to go for more bank borrowings while printing money to provide loan facilities in rupees and dollars to meet local and foreign borrowings, he opined.

Big business enterprises and other firms which are struggling to survive will have to cut their costs and the other companies will pass the 2.5 percent tax on their turnover to consumers, he pointed out.

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2021-11-21T08:00:00.0000000Z

2021-11-21T08:00:00.0000000Z

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