The International Monetary Fund (IMF) on Thursday said that Sri Lanka's tax reforms are necessary for the cash-strapped country to regain the confidence of creditors. The Lankan government announced a ban on strikes in several key sectors, just one day before a planned nationwide stoppage called by unions, which was aimed at protesting against hikes in taxes and utility bills.&nbsp;

However, Sri Lankan workers defied the ban as they went on a strike in order to protest against the government and its proposed rescue plan for the bankrupt nation. Workers forced the closure of some hospitals, banks, etc.&nbsp;

President Ranil Wickremesinghe has hiked corporate tax&nbsp;to 30 per cent from 24 per cent in January, after raising VAT (Value Added Tax) to 15 per cent last year. Wickremesinghe, who is also the country's finance minister, introduced tax hikes with effect from January widely believed to be on demand by the IMF.&nbsp;

The IMF said in a statement: "Sri Lanka is among the countries to collect the least amount of fiscal revenue in the world, with tax revenue to GDP ratio at only 7.3 per cent in 2021. External creditors are not willing to provide financing to fill this gap".&nbsp;

The IMF noted that it is aware of the difficulties faced by the common people in the nation at this crucial juncture. The global lender said: "Increases in the cost of living, loss of employment and livelihood, and falling real incomes have hit large parts of the population, and particularly the poor and vulnerable who have no buffers to withstand these hardships."&nbsp;

WATCH |&nbsp;Inside South Asia: Pakistan economy on the brink&nbsp;

<div class="ui-state-default" contenteditable="false">
<div class="twitter-block" draggable="false">
<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/inside-south-asia-pakistan-economy-on-the-brink-567802/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>
</div>
<a class="close-mark close-div" href="#" id="jqclosemark">×</a></div>

IMF mentioned that the current economic crisis has a number of origins, including the government's inability to meet government spending needs through its revenue collections.&nbsp;

The IMF said that tax reforms were needed as only "with appropriate tax receipts will the government will be able to fund essential expenditures, and avoid further slashing of critically important outlays". It said also in the statement: "These reforms will also help regain the confidence of creditors."&nbsp;

Last year in September, the IMF approved Sri Lanka a $2.9 billion bailout package over four years pending the nation's ability to restructure its debt with creditors - both bilateral and sovereign bondholders.&nbsp;

(With inputs from agencies)

WATCH WION LIVE HERE

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="350" loading="”lazy”" src="https://www.wionews.com/live-tv/embed?autoplay=1&amp;mute=1" width="100%"></iframe>

You can now write for wionews.com and be a part of the community. Share your stories and opinions with us <a href="https://www.wionews.com/content-contribution-registration-form">here</a>.

The International Monetary Fund (IMF) on Thursday said that Sri Lanka's tax reforms are necessary for the cash-strapped country to regain the confidence of creditors.

The International Monetary Fund (IMF) on Thursday said that Sri Lanka's tax reforms are necessary for the cash-strapped country to regain the confidence of creditors. The Lankan government announced a ban on strikes in several key sectors, just one day before a planned nationwide stoppage called by unions, which was aimed at protesting against hikes in taxes and utility bills. However, Sri Lankan workers defied the ban as they went on a strike in order to protest against the government and its proposed rescue plan for the bankrupt nation. Workers forced the closure of some hospitals, banks, etc. President Ranil Wickremesinghe has hiked corporate tax to 30 per cent from 24 per cent in January, after raising VAT (Value Added Tax) to 15 per cent last year. Wickremesinghe, who is also the country's finance minister, introduced tax hikes with effect from January widely believed to be on demand by the IMF. The IMF said in a statement: "Sri Lanka is among the countries to collect the least amount of fiscal revenue in the world, with tax revenue to GDP ratio at only 7.3 per cent in 2021. External creditors are not willing to provide financing to fill this gap". The IMF noted that it is aware of the difficulties faced by the common people in the nation at this crucial juncture. The global lender said: "Increases in the cost of living, loss of employment and livelihood, and falling real incomes have hit large parts of the population, and particularly the poor and vulnerable who have no buffers to withstand these hardships." WATCH | Inside South Asia: Pakistan economy on the brink × IMF mentioned that the current economic crisis has a number of origins, including the government's inability to meet government spending needs through its revenue collections. The IMF said that tax reforms were needed as only "with appropriate tax receipts will the government will be able to fund essential expenditures, and avoid further slashing of critically important outlays". It said also in the statement: "These reforms will also help regain the confidence of creditors." Last year in September, the IMF approved Sri Lanka a $2.9 billion bailout package over four years pending the nation's ability to restructure its debt with creditors - both bilateral and sovereign bondholders. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

IMF says Sri Lanka’s tax reforms essential to regain the confidence of creditors

The future of Sri Lanka Central Bank&#39;s governor, Arjuna Mahendran, is at risk. &nbsp; 
&nbsp; 
His mandate expires by the end of June and his reappointment has become increasingly unlikely. &nbsp; 
&nbsp; 
Mahendran was appointed in January 2015, shortly after the elections that put an end to the 10-year rule of former President Mahinda Rajapaksa. &nbsp; 
&nbsp; 
His appointment was strongly backed by the Prime Minister of the island nation, Ranil Wickremasinge.&nbsp; 
&nbsp; 
Shortly after taking office, Mahendran was allegedly involved in a state-bond scam. A company owned by his son-in-law bought 30-year bonds at an interest rate higher than the market offered. The governor is accused of providing inside information. Investigations are still ongoing.&nbsp; 
&nbsp; 
At the time of the scam, newly-elected President Maithripala Sirisena had suggested Mahendran resign for the trial&#39;s duration. Prime Minister Ranil Wickremasinge, who strongly backed the governor&#39;s appointment, publicly disagreed with the President&#39;s statement.&nbsp; 
&nbsp; 
As the end of Mahendran&#39;s&nbsp;mandate nears, cabinet-level opposition is increasingly loud.&nbsp; 
&nbsp; 
The Minister of Social Empowerment and Welfare, SB Dissanayake, during a recent parliament session, said that the country&#39;s top political leaders should not reappoint the governor. &ldquo;The best thing the President and the Prime Minister can do is to let him go home without giving him an extension. We are not satisfied with his work.&rdquo;&nbsp; 
&nbsp; 
He is not the only political heavyweight to oppose the reappointment. The Minister of Fisheries Aquatic Resources, Mahinda Amaraweera, stated that action should be taken against the governor.&nbsp; 
&nbsp; 
All eyes are now on the Sri Lanka Prime Minister, as&nbsp;Mahendran can&#39;t possibly retain power without his support. Whether he has it or not remains to be seen. 
(WION)&nbsp;

The President and two ministers publicly oppose Mahendran's reappointment after his alleged participation in state-bond scam

The future of Sri Lanka Central Bank's governor, Arjuna Mahendran, is at risk. His mandate expires by the end of June and his reappointment has become increasingly unlikely. Mahendran was appointed in January 2015, shortly after the elections that put an end to the 10-year rule of former President Mahinda Rajapaksa. His appointment was strongly backed by the Prime Minister of the island nation, Ranil Wickremasinge. Shortly after taking office, Mahendran was allegedly involved in a state-bond scam. A company owned by his son-in-law bought 30-year bonds at an interest rate higher than the market offered. The governor is accused of providing inside information. Investigations are still ongoing. At the time of the scam, newly-elected President Maithripala Sirisena had suggested Mahendran resign for the trial's duration. Prime Minister Ranil Wickremasinge, who strongly backed the governor's appointment, publicly disagreed with the President's statement. As the end of Mahendran's mandate nears, cabinet-level opposition is increasingly loud. The Minister of Social Empowerment and Welfare, SB Dissanayake, during a recent parliament session, said that the country's top political leaders should not reappoint the governor. “The best thing the President and the Prime Minister can do is to let him go home without giving him an extension. We are not satisfied with his work.” He is not the only political heavyweight to oppose the reappointment. The Minister of Fisheries Aquatic Resources, Mahinda Amaraweera, stated that action should be taken against the governor. All eyes are now on the Sri Lanka Prime Minister, as Mahendran can't possibly retain power without his support. Whether he has it or not remains to be seen. (WION)

Sri Lanka Central Bank governor faces high-profile opposition

sri-lanka-economics

Sri Lanka Economics, News on Sri Lanka Economics, stories on Sri Lanka Economics, articles on Sri Lanka Economics, Sri Lanka Economics stories at Wion, Sri Lanka Economics news, Sri Lanka Economics latest news

sri lanka-economics

IMF says Sri Lanka’s tax reforms essential to regain the confidence of creditors

Sri Lanka Central Bank governor faces high-profile opposition