The second reading of the 2026 Appropriation Bill, presented by President Anura Kumara Dissanayake in his capacity as Finance Minister today (November 7) at 1:30 PM, has ignited serious doubts among critics regarding the nation’s ability to manage its debt and tax burden. The budget includes a “popular” relief package that has drawn both support and skepticism.
According to high-level government sources, the budget proposes a 30% salary increase for all government employees, including staff officers, and aims to integrate all pensioners into the 2019 retirement year framework. These relief measures alone are expected to require an additional allocation of LKR 13 billion. Furthermore, a proposed additional 30% salary increase in 2027 has been criticized by analysts as an overly ambitious and unrealistic promise driven by political gain.
The budget anticipates a massive revenue generation of LKR 65 billion in the upcoming financial year to offset these substantial expenditures. This ambitious revenue target has fueled fears of further increases in indirect and direct taxes on the general public. Some political analysts suggest that the government’s attempts to provide relief are a strategy to mask the burden of tax hikes.
In a move that will significantly impact average consumers, while vehicle taxes have not been increased in this budget, the proposal to import used vehicles has reportedly been withdrawn. This indicates that, despite no direct tax increases on motor vehicles, an indirect import restriction has been imposed, denying middle-class citizens the opportunity to purchase affordable used vehicles.
While the allocation of LKR 24 billion for “Aswasuma” benefits for low-income earners and special relief proposals to encourage exports are seen as positive steps, concerns have been raised that the government has not definitively disclosed how these proposals will affect the nation’s overall debt burden.
The debate on the second reading of these budget proposals is scheduled to take place from November 8 to December 5. The opposition has stated that a broader discussion is needed on this financial plan, which they claim will devastate the country’s economy.
