CIMA Sri Lanka, the world’s largest and leading professional body of management accountants recently hosted a discussion on the Business Impact of the National Budget 2018 at the Oak Room, Cinnamon Grand in Colombo. The program was an analysis of the latest budget of Sri Lanka and its impact on the country’s population, explained by a range of CIMA-qualified esteemed speakers and panelists from various diverse sectors. The session commenced with Mr. Suresh Perera, FCMA, CGMA – Principal, Tax and Regulatory of KPMG Sri Lanka, taking the stage to present an overview of the 2018 budget from the perspective of taxation, particularly about import levies, providing the audience with an insight to the tax system in Sri Lanka. Addressing the new taxes introduced in the 2018 budget, Mr. Perera specified that the taxes are forecasted to generate 37.5% of the Rs. 110 Bn revenue expected from all tax proposals for the year ahead.
Some of the aspects of the budget that were clarified were the controversial debt service levy, the newly introduced carbon tax, excise duties concerning alcoholic beverages, the excise special provision on sweetened beverages, informally known “sugar tax”, liberalization of the budget pertaining to shipping and freight forwarding, ownership by foreigners and the numerous taxes introduced. Upon conclusion of the aforesaid, he concluded, “The country needs a tax ombudsman to address the grievances of taxpayers along with a National Tax Council to determine both long-term and short-term tax policy”. Mr. Hasitha Premarathna, FCMA, CGMA, the Chief Financial Officer of Brandix Lanka Ltd, assessed the impact of 2018’s budget on businesses, drawing from his ample expertise in the fields of capital markets, economics, strategic finance, management and research.
His observation included the simplicity of tax changes made, increasingly eco-conscious turn taken, the lack of entrepreneurial encouragement made practically in spite of budget provisions made for it in previous years, the brunt to be borne by the telecommunication sector and most notably, the newly imposed carbon tax, and debt service levy on banks, the latter which he speculated could be passed on to customers. Speaking on the former, Mr. Premarathna stressed, “Taxes have to be made to drive behavior towards eco-consciousness.”
Dr. Anura Ekanayake, an independent economist/ past Chairman of the Ceylon Chamber of Commerce, made an insightful contribution to the seminar which was centered on the macroeconomic impact to business by the 2018 budget. He touched on macroeconomic fundamentals and borrowing as well as debunked common macroeconomic myths and misconceptions.
Speaking on the debt challenge the country faces, Dr. Anura stated, “Most independent economists agree that the budget deficit is at the core of most, if not all, our macroeconomic challenges. We have a debt of Rs. 7000 bn that is due in three years and the current budget has to do this. It is very encouraging that steps are being taken to address the deficit with the budget proposed showing promise regarding revenue inflow. It’s simple. Wasteful expenditure has to be reduced for more revenue to be collected, and this has to be kept in mind by all citizens, businessmen and accounting professionals alike”.
Hon. Eran Wickramaratne, the State Minister of Finance, was the key feature in the panel discussion that followed. He elaborated on the justification for myriad aspects of the budget proposed while providing a summary of its estimated impact on both the public and private sector alike. Sharing his perspective on some of the burgeoning issues the state faces about social equitability, Hon. Wickramaratne shared, “We have created a society who are largely dependent on the state, and I say this only as a criticism of the system we have created. The role of the government is to create an environment in which people can take their destiny into their own hands. This is a hard decision to make, but this means people will not receive as many economic benefits as in previous years. We cannot just focus on the present but have to think about the future of the country and its citizens.”
The Hon. Minister also stated “We are very rights based. We are very open to discussion and we are very open to do the best we can for the country”.
The panel discussion also featured the speakers and guest panelists. The panelists included Ms. Rifka Ziyard, FCMA, CGMA, the moderator (Associate Director of Tax and Regulatory at KPMG), renowned banker and the Managing Director of Royal Ceramics Lanka, Mr. Aravinda Perera; acclaimed economist at the Sri Lanka’s Ministry of Finance, Mr. Deshal de Mel and Ms. Nishani Ariyawansa, the financial controller of Standard Chartered Bank.
This event was sponsored by HNB General Insurance and Montrela Consultants.
Find out more about the CIMA qualification at www.cimaglobal.com/SriLanka. For further information, email CIMA Sri Lanka at email@example.com or firstname.lastname@example.org or call +94 (0) 112 503 880.