ECONOMYNEXT – The Government plans to slash spending and push up non-tax revenues in a bid to keep the budget deficit at 5 per cent of gross domestic product in 2020, after a steep cut in value-added tax from December, Minister Bandula Gunewardene said.
“We expect to make steep cuts in spending. We do not wish to have large staff recruitments. Even ministers will not spend lavishly,” Gunewardene said.
“The deficit can be reduced by raising revenues or cutting spending,” he added.
He said attempts will also be made to boost non-tax revenues.
The Cabinet has approved a cut in a 15 per cent value-added tax and a 2 per cent non-recoverable nation building tax to 8 per cent of 1 December, he said.
A host of other tax cuts have also been announced for which a date has not been announced.
Gunewardene said a fees and rents charged on several areas will be market priced. Government assets such as warehouses have been given where fees have not been revised for many years, he said.
State enterprises, many of which are losing money, will also be made more efficient, he said.
Officials will be recruited to run them with performance targets, he added. (Colombo/Nov29/2019)