Sri Lanka's Cabinet approves proposal to amend laws to increase state revenue

Sri Lanka is hoping for a Rapid Finance Instrument (RFI) facility as well as a larger Extended Fund Facility (EFF) from the international financial body.

Published: 31st May 2022 02:20 PM  |   Last Updated: 31st May 2022 02:20 PM   |  A+A-

Sri Lanka PM Ranil Wickremesinghe

Sri Lanka PM Ranil Wickremesinghe (File photo| AP)

By PTI

COLOMBO: Crisis-hit Sri Lanka's Cabinet has approved a proposal by Prime Minister Ranil Wickremesinghe to amend several laws, including on inland revenue, VAT, telecommunications levies, betting and gaming, to raise the state revenue severely affected by the current economic crisis.

In 2019, the government had decided to reduce the rates of value-added tax, personal income tax, and corporate income tax, as well as to shrink the tax base on value-added tax and income tax, resulting in a significant drop in the state revenue, an official statement said.

To increase the revenue, the Cabinet of ministers in a meeting held on Monday approved a proposal presented by Prime Minister Wickremesinghe, who is also the country's Finance Minister, to amend several Acts of Parliament on Inland Revenue, VAT, Telecommunications levies, betting and gaming.

The island, facing its worst economic crisis since independence from Britain in 1948, has tapped the International Monetary Fund (IMF) for a bailout.

In April, the two sides convened their first round of talks at the International Monetary Fund headquarters in Washington.

Sri Lanka is hoping for a Rapid Finance Instrument (RFI) facility as well as a larger Extended Fund Facility (EFF) from the international financial body to help it deal with its foreign currency shortages, which have triggered an economic crisis.

In the last meeting, the IMF assured to help the country with an amount of USD 300 million to USD 600 million.

On April 12, Sri Lanka suspended its debt servicing for the first time in its history.

The economic crisis has also triggered political unrest with a protest occupying the entrance to the president's office demanding his resignation has been continuing for more than 50 days.



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