(Corrects typographical error in headline)
COLOMBO Dec 10 Sri Lanka's coalition government
on Saturday won the final vote on its 2017 budget which aims to
boost revenue and cut the fiscal deficit to 4.6 percent of GDP
from this year's 5.4 percent with a more than two-thirds
The budget, which contains some long-term reforms and
measures to boost revenue, was passed with 165 in favour, 55
against and 4 absent in the 225-member parliament.
The government aims to boost its 2017 tax revenue by 27
percent to 1.82 trillion rupees ($12.36 billion) year on year,
to meet a commitment given to the International Monetary Fund in
return for a $1.5 billion loan in May
Some opposition members backing defeated former leader
Mahinda Rajapaksa, now a parliament member on the opposition
benches, voted against the budget.
The coalition government of President Maithripala Sirisena's
centre-left party and Prime Minister Ranil Wickremesinghe's
centre-right party struggled to implement key 2016 budget
proposals as they disagreed on raising the value added tax (VAT)
until last month.
The government's medium-term economic strategy foresees
cutting the deficit to 3.5 percent of GDP by 2020 while
increasing the direct taxes.
Finance Minister Ravi Karunanayake expects revenue to
improve through a more streamlined and simplified automated tax
The $82 billion economy's tax-to-GDP ratio is forecast to
rise to 13.5 percent in 2017, from this year's 11.6 percent.
The government faced a debt and balance-of-payments crisis
earlier this year before the IMF came to the rescue. The central
bank expects the $82 billion economy to grow between 5-5.5
percent this year, higher than last year's 4.8 percent.
The International Monetary Fund on Friday revised down Sri
Lanka's economic growth to 4.5 percent in 2016, slower than the
earlier estimated 5 percent and said external factors could put
more pressure on the Indian Ocean island nation next year.
(Reporting by Ranga Sirilal and Shihar Aneez, editing by Louise