Budget 2025 addresses stakeholder inclusivity: Suriyapperuma

Finance and Planning Deputy Minister Harshana Suriyapperuma

 BDO Partners Managing Partner Sujeewa Rajapakse

• Speaking at BDO Partners webinar emphasises 2025 Budget is committed to driving growth while ensuring stakeholder needs are met

By Janani Kandaramage

Finance and Planning Deputy Minister Harshana Suriyapperuma expressed optimism over the 79th National Budget of the country, noting its commitment to revitalising the economy by targeting a 5% growth rate, empowering vulnerable communities and ensuring financial stability in businesses. This stance was conveyed yesterday at a post-Budget webinar organised by BDO Partners, a leading audit firm in Sri Lanka. 

Speaking about the features of the Budget, the Deputy Minister said: “Budget 2025 offers solutions that guarantee the continuity and certainty the business community is looking for, while including the needs of other stakeholders involved in the economy, ensuring they are not left behind as we strive to enhance business efficiency and economic advancement.” 

“As laid out in the Budget, there exists many proposals aimed at incentivising vulnerable communities including those with special needs, the elderly, the poor, women, and children. Our inclusion of all stakeholder needs is a testament to our commitment to generating employment, wellbeing, and growth across the country, expanding beyond the Western Province where growth has historically been confined to.” 

He added that specific emphasis on Northern and Eastern Provinces development throughout the Budget is indicative of the administration’s dedication to equitable economic transformation and greater societal progress. “The Northern and Eastern regions have historically been underdeveloped for decades due to lingering effects of the war. This has naturally triggered the ire of their residents. Unlike previous Governments, however, we strive to bridge the resource gap with these regions, and leverage the human capital capacity of its residents via enhanced agro-based incentives and allocation of funds to regional libraries. We hope that this will drive them into becoming effective contributors to the economy.”

Youth’s potential in driving economic sustainability

Other parties stressed upon was the youth, as the Deputy Minister acknowledged the youth’s potential in driving economic sustainability, calling them the future of the country. He said entrepreneurship development amongst the youth remains a key objective of the Government, aligning with its aspirations for innovation and economic growth. Entrepreneurship development, in addition to, enhanced vocational programs, improved school systems, and scholarship options to universities and schools aims to bolster value-added industries through a consistent supply of skilled, innovative, and entrepreneurial talent. He asserted, “As I recall, around 99 billion funds are allocated for these initiatives. This will connect local value-added industries to global value chains which is necessary as the Sri Lankan market is limited in scale and size. Therefore, by encouraging ties with global supply chains, we can continue to expand the reach of our markets as well as its brand value.”

Nevertheless, he observed that large-scale enterprises are not the only businesses that must be considered. 

Speaking about the role of the Small and Medium-sized enterprises (SME) in accelerating the developmental process, Suriyapperuma emphasised that a majority of businesses are classified SME or MSME in Sri Lanka. This implies the position of these enterprises as drivers of job creation and revenue generation, and relevant systems and support will be in place to ensure their efficiency and ease of doing business. 

In response to concerns over creating an environment conducive to investment, he assured the Government’s steadfast commitment to promoting foreign investment flows with necessary controls, so as to not disrupt the equilibrium. “In addition to offsetting the risk of economic volatility by setting limits on the amounts of investment we receive – we hope to encourage human capital development in both the public and private sector through these inflows, not solely limiting ourselves to investments in the form of business finance,” he opined.

Workforce development

“Workforce development is crucial as many struggled during the economic crisis, particularly the vulnerable as they lacked adequate income to support their families. This is also the reason the Budget proposed significant salary adjustments for both public and private sector employees in Sri Lanka.” The minimum basic salary for public sector employees is set to increase from Rs. 24,250 to Rs. 40,000, a rise of Rs. 15,750. Additionally, the President has proposed aligning annual salary increments for all public sector employees to a uniform percentage, ensuring equitable salary growth across the sector. For the private sector, the minimum monthly wage is scheduled to increase from Rs. 21,000 to Rs. 27,000 in April 2025, with a further increase to Rs. 30,000 from 2026. 

“The Budget has taken into consideration all the factors hindering people’s livelihoods including the rising cost of living and depreciation of the rupee, when considering these integral salary increments,” he added.

He also spoke of the significance of the National Tariff Policy outlined in the Budget as a foundational element for establishing a stable tariff framework to enhance the country’s competitiveness in trade and investment. The phased implementation of this policy, he believes, will eliminate anti-export biases and promote an export-oriented economy, safeguarding local exporters. Although he acknowledged the tight parameters posed by the International Monetary Fund (IMF), he stressed the importance of adherence to IMF policies as a means of ensuring debt repayments by 2028. “Therefore, you would see little change to tax structures in the Budget,” he noted. Nevertheless, the predictability of most tax structures like this would allow businesses to accurately forecast tax liabilities and plan for future financial obligations.

Reduction in standard corporate income tax rate

In the 2025 Budget, President Anura Kumara Dissanayake proposed a reduction in the standard corporate income tax rate from 30% to 15% for service exporters. This initiative, he highlighted, will stimulate the export sector by offering a more favourable tax environment. Although this segment of the Budget came under severe scrutiny over potential fiscal constraints, Suriyapperuma assured stakeholders that significant changes to taxes will not be made immediately, but rather in phases based on the fiscal stability of the nation.

Other stakeholder concerns that aim to be addressed include those of State-owned Enterprises (SOE). Speaking about how the public sector can be leveraged, he said: “Public-private partnerships will enhance competition, leading to improved productivity within public enterprises. This is obvious, but perhaps the key outcome of such a collaboration is that the whole economy can come to solutions over key ethical dilemmas such as sustainability and CSR initiatives to name a few.”

Overall, the Deputy Minister strongly believes that with focus on greater fiscal discipline, digitisation, educational advancement, and anti-corruption measures – while remaining faithful to IMF requirements – the country will be able to effectively service its debt and minimise socioeconomic disparities prevailing in the current system.