Reuters/Colombo

Sri Lanka will target a budget deficit of 3.5% of gross domestic product by 2020, Prime Minister Ranil Wickremesinghe told parliament on Thursday.
The prime minister was delivering the island nation’s medium term economic policy.
Sri Lanka’s budget deficit is expected to reach 6.5 to 6.8% of GDP this year, up from the government’s original target of 4.4%, the finance minister had said last month.
Prime Minister Wickremesinghe, outlining the country’s economic priorities ahead of the 2016 budget, said the government would minimise tax holidays and aim to garner more revenues from the rich through direct taxes.
The prime minister’s announcement that a proposal to impose a retrospective tax targeting corporates would be annulled helped boost investor confidence, analysts said.
In September, parliament approved finance bills to raise 80bn rupees in revenues, including from a super gains tax to be paid by corporates that earned more than 2bn rupees in the last financial year.
Analysts said the next trigger for the markets would be the budget, scheduled for November 20.