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Danushka Samarasinghe,  Chief Executive Officer/Director at Nation Lanka Equities (Pvt) Ltd

“Fears of additional taxes such as wealth tax, increase in VAT (value added tax), additional taxes on revenue etc. came to rest with the announcement of the 2023 budget proposals. Ending of uncertainty and speculation is a positive.”

“But it would have been better if there was time bounded targets for increasing government revenue from measures such as divesting state owned assets and SOEs. Just a mere mention of the intention of divestiture may not hold water. Also any significant reforms to reduce the public sector headcount was the need of the hour and seems to be omitted.”

Naveed Majeed, Senior Vice President, Asia Securities

“Investors were on the sidelines for the past couple of weeks in the anticipation of a capital gains tax on the stock market. But the absence of such a tax on the equity market will be viewed positively by the investors. But having said that, taxes that were introduced in the interim budget will go on to impact corporate performance broadly because now it’s a flat 30 percent corporate tax without any concessionary rate.”

“From a tax impact, we are going to see the disposable income being squeezed and then you are going to see an impact on demand which will impact corporate and finally the high-interest rates. While this might be one of the investment areas not being taxed, on the other hand, we are going to see corporate earnings being at risk.

Finally, it’s not going to be an entire index run but specific rather its going to be specific companies that are resilient that investors need to position for.

Dimantha Mathew, Head of Research at First Capital

“In terms of investor sentiments, there was nothing related to securities…There was only a mention of reducing para-tariffs in the long term…Which is a good thing,”

“I don’t think there would be a major reaction in the market because the budget that was presented today did not have any direct.”

Professor W. Wimalaratana, President of Sri Lanka Economic Association

“As a document, the budget is good and this is not an exceptional budget. Even in the past, when you are looking at budget speeches, budget documents all those were really attractive. When you are going to deliver, there will be a lot of issues. Supplementary budgets will be presented to the parliament because of allocated money is not sufficient.”

“When we look at the current economic crisis situation, this should be an exceptional budget. The main focus should be to expand the revenue of the government while reducing expenses. When we look at the budget there are no sufficient concrete strategies to increase the government revenue. Also privatization has been included.”

Sujata Gamage, Senior Research Fellow, LIRNEasia 

“They are opening another few medical colleges. It is amazing I mean we keep producing these doctors for the foreign market. We need a higher education responsibility act. The relative amounts for higher education and school education has changed over the years the relative percentage for higher education has increased.”

“We need quality education. But right now we are paying for paper qualifications. I remember in 2003 World Bank noted that we spent more on higher education as percentage of education budget than the normal.” (Colombo/Nov14/2022)

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