Pro-business Budget but implementation is key: Murtaza

Tuesday, 18 February 2025 00:01 - - {{hitsCtrl.values.hits}}

By Darshana Abayasingha

Advocata Institute Chairman Murtaza Jafferjee

Advocata Institute Chairman Murtaza Jafferjee yesterday termed the 2025 Budget as pro-business, but implementation was key.

“There is a misperception of the Government ideology given its roots. This is a market-oriented pro-business Budget. But the devil is in the details. If the Government can get implementation right, then in one year Sri Lanka will be in a better place,” Jafferjee said, delivering the keynote at the KPMG 2025 Budget Forum last night.

Using an economist’s lens – but “tinted with capitalism” – he said a few policies are problematic and hitting the revenue targets can be challenging, whilst debt remains a huge concern.

Tax revenue will have to grow by 23%, which is a tall order, he noted. “You will need many people who love cars more than houses to get that Rs. 230 billion number from vehicles.”

Jafferjee said he is confident the Government may hit the primary balance target spelt out in the Budget and recognised the need to enhance capital expenditure as spelt out in the Budget to ensure infrastructure remains serviceable.

However, he lamented under-priced fuel, which he said results in the richest 30% of households getting 70% of benefits. There is a need to grow export contributions to Sri Lanka’s growth as our representation globally is in very few products.

“We need Foreign Direct Investment (FDI). So, for the proposals to have more industrial zones is important. We need to attract foreigners to come and reside in our cities and work here and contribute to this process. We need to be more welcoming. We have a large diaspora so we need to attract some of them back,” Jafferjee said.

He also touched on the need to develop a capable State capable of driving implementation. “So we need high paying jobs in the State sector, but the pay is not good.”

KPMG Sri Lanka Principal – Tax and Regulatory Suresh Perera said: “We need more science in our tax systems and reforms. We need a specialised unit advising the Finance Minister. A trial and error basis won’t work. We have done that for 20 years now.” .

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