COPF says there are ‘missing estimates’ and ‘estimate mismatches’ in the ‘Budget 2019’

Colombo (News 1st): COPF says there are ‘missing estimates’ and ‘estimate mismatches’ in the ‘Budget 2019’The Committee on Public Finance (COPF) in its latest report highlighted that there are ‘missing estimates’ and ‘estimate mismatches’ in the ‘Budget 2019’. COPF Chairman and TNA MP M A Sumanthiran presented the ‘Report of the COPF on Assessment of the Fiscal, Financial and Economic Assumptions of the Budget 2019’ in Parliament today. ‘Missing estimates’ means that the estimates of fiscal consequences relating to the Budget proposals are absent or obfuscated in Budget 2019 and the associated documentation. ‘Estimate mismatches’ have occurred where budget estimates fail to match either with past data, or the fiscal, financial and economic assumptions provided. “The committee finds that the information provided in the budget has the effect of misleading Parliament about the fiscal consequences of several amendments to the Betting and Gaming Levy, where measures that specifically reduce collectable revenue, are presented to Parliament as measures that will achieve precisely the opposite,” the report stated. The report also provided several examples of fiscal measures that have a negative fiscal impact, but where the estimates on the magnitude of this impact are not provided. The report also provided examples of several areas of taxation where the revenue estimates provided seem to overstate the revenue that is likely to be collected. “Overstating revenue estimates can lead Parliament to also agree on higher expenditure levels, which then, when revenue does not meet expectations, leads to higher budget deficits, higher debt, higher interest, and finally a problem of sustainability of public finance. This problem of over-estimation requires special vigilance. It seems to be a systematic feature of budget information provided to Parliament. Over the years, this has led Parliament to agree to spending proposals that have resulted in the country being heavily indebted. According to the report, the estimated revenue from Pay As You Earn Tax, Value Added Tax, National Building Tax, Import duties and Corporate Tax is unlikely to be met. The report also noted that macroeconomic forecasts given in ‘2019 Fiscal Management Report’, ‘2019 Draft Budget Estimates’, ‘2019 Budget speech’ and information provided to the COPF by the Finance Ministry after the budget speech have differences.