Sri Lanka has little tax money left after paying state workers
Economy in historic crisis: Bandula Gunawardana
Sri Lanka is in the biggest economic crisis after independence from British rule and there was hardly any tax money left for other expenses after paying state workers, Trade Minister Bandula Gunewardene said.
“In 2020 the revenue of the government was 1,373 billion rupees,” he told parliament. “To pay the salaries of state workers 794 billion rupees are used. To pay pensions another 258 billion rupees are spent.
“To pay salaries and pensions only 1,052 billion rupees have been spent. To government’s total revenue is 1,373. It is with these taxes that state workers and paid salaries.
“So to pay interest on loans interest was 980 billion rupees, subsidies and transfers were 717 billion.
When 1,052 billion rupees out of the 1,373 billion in revenues go to pay salaries and pensions of state workers only 321 billion rupees is left.”
The elected ruling class gets lifetime pensions after five years in office and so do a few personal staff. Members of parliament usually appoint their wives or family members as personal secretary and similar position to get the pension
State worker salaries and pensions grew from 567 billion rupees in 2015 to 820 billion rupees in 2019 as a large chunk of the ‘revenue based fiscal consolidation’ was re-distributed to state workers.
Current Government worsened the crisis
In late 2019 taxes were slashed in a ‘fiscal stimulus’ along with unprecedented monetary stimulus that had created the biggest balance of payments deficits in history.
State worker recruitment were stepped up in 2020, leading to 86 percent of tax revenues going to for salaries and pensions in 2020 and the country downgraded to barely above default at ‘CCC’ and money printing eroding reserves.
“We have to accept as this august assembly, no parliament has faced such a crisis since independence,” Gunewardene said.
Leader of the house Lakshman Kiriella charged that the current regime had created the crisis by suddenly cutting taxes December 2019.
“That is the root of the economic crisis,” he said.
The taxes were cut without parliamentary approval, in exceptional regime uncertainty. The tax laws were changed only 2021, almost 18 months later.
A similar event had not occurred in any other country with a functioning parliament in after the end of tax changes by ‘Presidential Prerogative’
Sri Lanka’s rupee is now under severe pressure as unprecedented volumes of money is printed, blowing the balance of payments apart.
Speaking shortly before Minister Gunewardene, ex-Prime Minister Ranil Wickremesinghe suggested that Sri Lanka go to the IMF again
https://economynext.com/sri-lanka-h...ers-economy-in-historic-crisis-bandula-83398/
----------
රනිල් කිව්ව එක හරි. ආපහු හිගන පාත්තරේ අරගෙන IMF යදින්න යන්න වෙන්නේ.
නන්දෙගේ කයිය නම් කොහොමද? මාසෙකට රජයේ උන්ට පඩියයි, පෙන්ෂන් එකයි ගෙව්වම් පස්සේ රට ගෙනියන්න සල්ලි මදි ... අනේ හුකේ
Economy in historic crisis: Bandula Gunawardana
Sri Lanka is in the biggest economic crisis after independence from British rule and there was hardly any tax money left for other expenses after paying state workers, Trade Minister Bandula Gunewardene said.
“In 2020 the revenue of the government was 1,373 billion rupees,” he told parliament. “To pay the salaries of state workers 794 billion rupees are used. To pay pensions another 258 billion rupees are spent.
“To pay salaries and pensions only 1,052 billion rupees have been spent. To government’s total revenue is 1,373. It is with these taxes that state workers and paid salaries.
“So to pay interest on loans interest was 980 billion rupees, subsidies and transfers were 717 billion.
When 1,052 billion rupees out of the 1,373 billion in revenues go to pay salaries and pensions of state workers only 321 billion rupees is left.”
The elected ruling class gets lifetime pensions after five years in office and so do a few personal staff. Members of parliament usually appoint their wives or family members as personal secretary and similar position to get the pension
State worker salaries and pensions grew from 567 billion rupees in 2015 to 820 billion rupees in 2019 as a large chunk of the ‘revenue based fiscal consolidation’ was re-distributed to state workers.
Current Government worsened the crisis
In late 2019 taxes were slashed in a ‘fiscal stimulus’ along with unprecedented monetary stimulus that had created the biggest balance of payments deficits in history.
State worker recruitment were stepped up in 2020, leading to 86 percent of tax revenues going to for salaries and pensions in 2020 and the country downgraded to barely above default at ‘CCC’ and money printing eroding reserves.
“We have to accept as this august assembly, no parliament has faced such a crisis since independence,” Gunewardene said.
Leader of the house Lakshman Kiriella charged that the current regime had created the crisis by suddenly cutting taxes December 2019.
“That is the root of the economic crisis,” he said.
The taxes were cut without parliamentary approval, in exceptional regime uncertainty. The tax laws were changed only 2021, almost 18 months later.
A similar event had not occurred in any other country with a functioning parliament in after the end of tax changes by ‘Presidential Prerogative’
Sri Lanka’s rupee is now under severe pressure as unprecedented volumes of money is printed, blowing the balance of payments apart.
Speaking shortly before Minister Gunewardene, ex-Prime Minister Ranil Wickremesinghe suggested that Sri Lanka go to the IMF again
https://economynext.com/sri-lanka-h...ers-economy-in-historic-crisis-bandula-83398/
----------
රනිල් කිව්ව එක හරි. ආපහු හිගන පාත්තරේ අරගෙන IMF යදින්න යන්න වෙන්නේ.
නන්දෙගේ කයිය නම් කොහොමද? මාසෙකට රජයේ උන්ට පඩියයි, පෙන්ෂන් එකයි ගෙව්වම් පස්සේ රට ගෙනියන්න සල්ලි මදි ... අනේ හුකේ
ranil avilla goda dana set ekakut innawa. aurudu 75k ma rata goda dapu hati kaurut katha karan na oya okkoma ekathu wela.
