The Hon. Namal Rajapaksa, Attorney-at-Law

¶ 01 Hon. Deputy Speaker, thank you for the opportunity to speak during the Budget Debate.

¶ 02 A Budget lets us see the economic direction and implementation path within the year. The Government side says it consulted many sectors. But did it consult those who drafted its own policy manifesto? Many tax increases and measures were made before the Budget—fine. The President also said he would not increase taxes through the Budget—fine, because many were already increased.

¶ 03 Within the IMF framework, we repeatedly said the economy must be steered to mid-term targets. Yet, after coming to power, you now present many policies similar in substance to those you criticized for 76 years. Some steps are commendable—on digitalization, for instance. As former Minister for Digital Technology, I worked to advance the Unique Digital Identity (UDI) up to the tender stage, but after the “Aragalaya” the Government shifted priorities. The current Government is now focusing on it, which is good, but regulations are needed. The President can operationalize the Data Protection Authority under the Personal Data Protection Act already passed by Parliament. Then JVP opposed it—but now you can constitute the Authority and appoint officers to protect citizens’ data. We do not yet see these steps.

¶ 04 If you proceed with the IMF, you must raise around Rs. 900 billion more revenue than 2024—about an additional trillion rupees. Many tax rises were pre-Budget. The President stated that vehicle imports would be allowed and that Rs. 300 billion in tax revenue is expected thereby. During the election, you promised vehicles for Rs. 1.2 million. With current taxes, even the cheapest vehicles cost Rs. 8–10 million. A Rs. 5 million lease over four years means a monthly installment around Rs. 132,000. How will the middle class or public servants who expected Rs. 1.2 million vehicles now afford Rs. 8–10 million cars? If vehicle sales fall short and revenue is not realized, will you introduce new taxes mid-year—like property or inheritance taxes?

¶ 05 On digitalization: taxing services at 15 percent—do digital services fall within this? Yes. You target a US$15 billion digital economy and US$5 billion ICT exports. What is the plan to reach US$5 billion? If you levy 15 percent taxes on those dollars too, why would foreign or local investors choose Sri Lanka? On PAYE/APIT, the threshold went to Rs. 150,000—not Rs. 200,000 as discussed for IT workers. Creator economy participants—YouTubers, bloggers, gamers—earning dollars will also face 15 percent tax. How will a new generation of entrepreneurs grow?

¶ 06 You propose a development bank. But under current banking law and CBSL regulations, without collateral assets, banks cannot lend. Unless you amend the laws and regulations, a new bank will not help startups; banks still demand collateral and even equity. Without reform, past allocations to entrepreneurs also yielded limited benefit.

¶ 07 You are also removing SVAT, which simplified VAT for exporters and those importing raw materials for export. This will push exporters back to cumbersome refund systems. If you cannot negotiate even such practical matters with the IMF, what message do you send to business?

¶ 08 On FDI and jobs: Sri Lanka has attracted roughly US$20 billion total FDI since 1977, most between 2005–2015. Vietnam attracts about US$20 billion annually by simplifying systems and ensuring fair, predictable taxation. In our past, when Shangri-La invested, probes were launched; Port City too faced probes. Your political culture often drove investors away. Since you took office, at least two major global investors have turned away. Why not engage them—Adani or United Petroleum—and resolve issues?

¶ 09 Education: the Prime Minister once pledged 6 percent of GDP for education. Today, as Minister of Education, the allocation is about 1.98 percent. You now argue quantum matters, not percent—fine—but that differs from your earlier stance.

¶ 10 Rail vs. bus: You allocate Rs. 3 billion to procure buses but only Rs. 250 million for the Kelani Valley rail upgrades—barely half a kilometre’s worth at today’s costs. You say this is your own Budget, not the IMF’s, but it has become a pickle of small measures: a little to satisfy IMF, a little to satisfy promises.

¶ 11 Fertilizer: allocation has dropped from Rs. 54 billion last year to Rs. 35 billion now, though you say the per-farmer grant goes from Rs. 15,000 to Rs. 25,000. For paddy purchases, Rs. 5 billion buys roughly 41,000 metric tons at Rs. 120/kg. What is the plan to defeat the paddy mafia? With these limited steps, new mafias will rise.

¶ 12 National security underpins all. A Cabinet Minister said minimal funds were allocated as there is no issue now. Yet we saw two murders yesterday—one in Mideniya, including two children—and a killing inside a court before a State Counsel. If the Government claims citizens can walk safely anywhere, how do broad-daylight killings occur?

¶ 13 Without ensuring investors’ and citizens’ security, you cannot build a US$15 billion IT economy or attract FDI under these taxes. Please secure citizens, and do not import JVP’s old methods into State practice; that is not the country’s culture and harms the economy and tourism when international media report daylight shootings and court murders. We wish the President and Government well; at least fulfill your election promises through this Budget. Thank you.