COLOMBO: Sri Lanka’s budget for next year will be “revolutionary” while narrowing the deficit through new revenue measures, including the introduction of the much talked about capital gains tax on property, officials said.
Finance Minister Ravi Karunanayake told reporters last week that he intended to unveil what he called a revolutionary budget on Thursday reducing the deficit to 4.7 percent of GDP, down from 5.4 percent in calendar 2016.
“It is going to be a revolutionary budget,” Karunanayake said at a dinner he hosted Thursday for reporters and owners of media institutions. “There will be capital gains on property, but not on share transactions.”
“There are some people who have made huge capital gains on property and they must contribute part of that to the state,” the minister said adding that any gains made within 10 years of purchase will be liable. He did not give details of the plan, but said stock market transactions will be exempt.
Prime Minister Ranil Wickremesinghe had called for capital gains tax in June after the government failed to implement it in the 2016 budget (presented last year) following opposition from lobby groups.
The restoration of capital gains tax had been an essential component of the government’s negotiations with the International Monetary Fund to secure a 1.5 billion dollar bail out in June.
