VAT replaces GST, NSL

By Sumadhu Weerawarne and Kesara Abeywardena
The UNF government’s first budget presented on Friday saw the replacement of GST and NSL with value added tax (VAT), many incentives to the private sector and prospective foreign investors, a reduced role for the public sector in general terms and drastic reforms to state sector pension policy.

The proposals centred on a private-sector driven revitalisation of the economy and little by way of traditional boons. There was no provision to increase public sector salaries for a second consecutive year.

Minister K N Choksy presenting the budget conceded that in the current situation where the government was cash-strapped, the people would face "some measure of burden" at the outset, but that the government would try to cushion it as far as it is "practicably possible".

The budget he described as being the foundation for the government’s economic revitalisation and poverty reduction programme, which he said would be carried on through many more budgets in the next three years. The public he said will understand the prevailing situation and soon see the overall and ultimate benefits of out budgetary measures, and opt for these rather than short-term temporary gain.