Lanka Engages Multilateral Agencies for Economic Recovery Talks

The focus of the discussions was on the government’s reform programmes aimed at economic recovery and sustainable growth….reports Asian Lite News

The Sri Lankan government on Tuesday convened a roundtable discussion with representatives from multilateral organisations on its economic reforms, the President’s Media Division (PMD) said.

Representatives from the World Bank, Asian Development Bank, International Monetary Fund, Asian Infrastructure Investment Bank, Multilateral Investment Guarantee Agency and other organizations attended the discussions, the PMD said in a statement.

The focus of the discussions was on the government’s reform programmes aimed at economic recovery and sustainable growth, the PMD said, Xinhua news agency reported.

The two sides discussed challenges, opportunities and commitments for Sri Lanka’s development, the PMD said.

Following the economic crisis in 2022, Sri Lanka has held a series of discussions with these multilateral agencies.

The session was opened by the President Ranil Wickremesinghe. He delivered an address on the growth and strategic directions for Sri Lanka as it moves from recovery to a sustainable growth path.

The President also made firm commitments for the Government to work hand in hand with the private sector to unlock key investments in new and existing economic sectors moving forward, together with exploring opportunities in pursuing Green initiatives and championing Sri Lanka as a regional logistics hub in the near future.

Outcomes from the discussions in the Roundtable signaled overwhelming commitment and confidence from both the Developmental Partners and the Private Sector in the Government’s present reform efforts. The Government has also provided a clear framework to improving coordination and communications, along with detailed action plans on the implementation and delivery of the reform agenda.

To strengthen delivery, the Government has plans to set-up a Presidential Delivery Unit, conduct Economic Labs with the private sector, and hold Open days to communicate outcomes to the public of what has been achieved and delivered.

Marking the Reform Priorities, Progress, Challenges and Opportunities, Secretary to the Treasury and the Ministry of Finance, K. M. Mahinda Siriwardana made a presentation under the theme of “Progress on key stabilization measures and structural reforms undertaken since the last roundtable discussion in December 2022 and planned over the medium term to sustain stability, promote growth, and re-establish credit worthiness” while outlining the Government’s reform coordination platform around which Multilateral Development Banks can work.

Governor of the Central Bank of Sri Lanka Dr. P Nandalal Weerasinghe highlighted the progress on debt restructuring made by the Sri Lankan Government. Alongside these presentations and remarks, international development partners including IMF, World Bank, MIGA, ADB, AIIB, ЛСА, USAID, EU, UN and private sector development partners made an interactive length long discussion and shared their views on the matter.

The session was also attended by Prime Minister Dinesh Gunawardena, Minister of Foreign Affairs Ali Sabry, Minister of Power and Energy Kanchana Wijesekara and State Minister of Finance Ranjith Siyambalapitiya and Senior Advisor on National Security to the President and Chief of Staff Sagala Ratnayaka, Dr. R.H.S. Samaratunga and Foreign Ministry Secretary Ms Aruni Wijewardane all representing the Government of Sri Lanka.

Sri Lanka to Increase VAT to 18%

Sri Lankan has approved to increase the value added tax (VAT) to 18 per cent from January, 2024, cabinet spokesperson Bandula Gunawardena said on Tuesday.

At a press conference here on Tuesday, Gunawardena said that increased VAT will also be imposed on certain goods and services that are currently not being taxed.

He said that the government has taken significant steps to increase tax revenue. The tax revenue in the first nine months of 2023 was 51 per cent higher than in 2022, he added, Xinhua news agency reported.

However, the government has failed to reach tax collection targets agreed on with the International Monetary Fund (IMF), leading to the IMF delaying the release of the second tranche of its financial aid package, he said.

The South Asian country reduced VAT from 15 percent to 8 percent in 2019, and raised it two times to 15 per cent in 2022.

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