Business
Verité Research highlights key takeaways from Budget 2022
Verité Research hosted an expert commentary on the budget speech immediately after it was presented to parliament on November 12, 2021. The commentary focused on the promises stated in the budget speech along with analytical insights from PublicFinance.lk.
Major Highlights
▪ According to the values given in the budget speech, revenue is expected to grow by 46% to LKR 2,284 billion in 2022. Several new taxes and tax increases are proposed in this regard: surcharge tax on profits, social security contribution, and financial VAT.
▪ Even if the projected contribution from the new revenue measures (LKR 333 billion) is considered realistic, the rest of the revenue base would need to grow by 24% in 2022 – at least double the expected nominal GDP growth – to achieve the expected revenue target. The discussion concluded that the estimated revenue growth of 46% was highly ambitious.
▪ Whilst several panellists agreed that weak revenue generation is a critical constraint in the Sri Lankan economy, efforts to improve digitalisation of the tax system and other administrative improvements were highlighted by some panellists.
▪ Similarities between the super gain tax introduced in the 2015 interim budget and the newly introduced surcharge tax were discussed. The tax is expected to bring a revenue of LKR 100 billion. However, due to its one-off nature, this tax will not be a sustainable solution to the structural revenue constraints in Sri Lanka. Furthermore, it is a retrospective tax that will undermine the government’s stated objective of creating a stable and predictable tax regime.
▪ The proposed social security contribution appears similar to NBT tax that was removed in 2020, but the budget projects collection to be around 40% more than the typical annual collection from NBT (LKR 105 billion in 2019). This ambitions projection is in spite of having a tax-free threshold (LKR 120 million per annum) ten times higher than the NBT threshold (LKR 12 million per annum), with implementation occurring only once legislation is passed in April.
▪ Concerns were raised regarding the dampening impact the new taxes may have on investor confidence, particularly since many of the new measures are one-off in nature, and in the case of the surcharge tax, it is retroactive in operation. The misalignment between the allocations provided in the budget speech and the priorities of the economy was highlighted throughout the discussion. The high allocations for defence, road development, and generally high levels of capital expenditure over allocations for education, healthcare, and skill development were identified as being problematic.
▪ The panellists also highlighted that social security should not be limited to Samurdhi payments and should have a wider scope in ensuring the safety and the security of the citizens.
▪ The proposal to include an amendment to the Appropriation Bill preventing requests for Supplementary Estimates for 2022 was viewed in a positive light by the panellists as it would ensure that the deviation from the budgeted and actual expenditure would be minimised.
▪ The failure of the budget to address some of the critical issues facing the economy was also highlighted. The lack of attention to and focus on the management of external debt, the lack of a clear plan to regain access to international capital markets, and the related implications for dollar liquidity in the banking system were identified as shortcomings in this year’s budget.
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) proudly facilitated the first-ever Sri Lankan delegation’s participation at Drupa 2024, the world’s largest trade fair for the printing industry and technology. Held after an eight-year hiatus, Drupa 2024 was a landmark event, marking significant advancements and opportunities in the global printing industry.
AHK Sri Lanka played a pivotal role in organising and supporting the delegation, which comprised 17 members from the Sri Lanka Association for Printers (SLAP), representing eight companies from the commercial, newspaper, stationery printing, and packaging industries. This pioneering effort by AHK Sri Lanka not only showcased the diverse capabilities of Sri Lanka’s printing sector but also facilitated vital bilateral discussions with key stakeholders from the German printing industry.
Business
Unveiling Ayugiri: Browns Hotels & Resorts sets the stage for a new era in luxury Ayurveda Wellness
In a captivating reimagining of luxury wellness tourism, Browns Hotels & Resorts proudly unveiled the exquisite Ayugiri Ayurveda Wellness Resort Sigiriya. This momentous occasion, celebrated amidst a vibrant and serene grand opening on the 6th of June, heralds a new chapter in the Ayurveda wellness tourism landscape in Sri Lanka. Nestled amidst 54 acres of unspoiled natural splendour, Ayugiri features 22 exclusive suites and stands out as the only luxury Ayurveda wellness resort in the country offering plunge pools in every room, rendering it truly one-of-a-kind.
The grand opening of Ayugiri Ayurveda Wellness Resort was an enchanting event, where guests were captivated by the melodies of flutists and violinists resonating through Sigiriya’s lush landscapes. As traditional drummers and dancers infused the air with vibrant energy, Browns Hotels & Resorts’ CEO, Eksath Wijeratne, Kotaro Katsuki, Acting Ambassador for the Embassy of Japan and General Manager, Buwaneka Bandara, unveiled the resort’s new logo, marking a significant moment witnessed by distinguished guests from the French Embassy, Ayurveda and wellness enthusiasts along with officials from the Sigiriya area, LOLC Holdings and Browns Group.
“Our strategic expansion into wellness tourism with Ayugiri Ayurveda Wellness Resort Sigiriya symbolises a significant milestone for Browns Hotels & Resorts. Wellness tourism has consistently outperformed the overall tourism industry for over a decade, reflecting a growing global interest in travel that goes beyond leisure to offer rejuvenation and holistic well-being. By integrating the timeless wisdom of Ayurveda with modern luxury, we aim to set a new standard in luxury wellness tourism in Sri Lanka. Whether your goal is prevention, healing, or a deeper connection to inner harmony, Ayugiri offers a sanctuary for holistic well-being” stated Eksath Wijeratne.
Ayugiri encapsulates the essence of life, inspired by the lotus flower held by the graceful queens of the infamous Sigiriya frescoes. Just as the lotus emerges from the murky depths, untainted and serene,
Ayugiri invites guests on a journey of purity and rejuvenation, harmonised with a balance of mind, body and spirit, the essence of nature, echoes of culture and the wisdom of ancient Ayurvedic healing.
HNB General Insurance, one of Sri Lanka’s leading general insurance providers, has been honored as the Best General Bancassurance Provider in Sri Lanka 2024 by the prestigious Global Banking and Finance Review – UK.
The esteemed accolade underscores HNB General Insurance’s unwavering commitment to excellence and its outstanding performance in the field of bancassurance. Through dedication and hard work, the HNB General Insurance team has continuously endeavored to deliver innovative insurance solutions, cultivate strong relationships with banking partners, and provide unparalleled service to customers nationwide. This recognition is a testament to the team’s dedication and relentless pursuit of excellence in the bancassurance business.
“We are honored to receive this prestigious award, which reflects our team’s tireless efforts and dedication to delivering value-added insurance solutions and exceptional service through our bancassurance partnerships,” said Sithumina Jayasundara, CEO of HNB General Insurance. “This recognition reaffirms our position as a trusted insurance provider in Sri Lanka and motivates us to continue striving for excellence in serving our customers and communities.”
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