To increase tax revenue to 12% of GDP by year end:
4.1% growth in 2023 third quarter seen:
State Finance Minister Shehan Semasinghe said that the government is currently having engagements with commercial creditors and private bondholders and expressed confidence that it will reach a resolution enabling the country to be debt sustainable.
The State Minister said that government has had extensive discussions with bilateral creditors with the assistance of International Monetary Fund officials and the government has been able to come into agreement with them .
“We are now working to convert them into MoUs.We have Special Official Creditor Committee cochaired by Japan India and France.We are happy that we reach agreement with all our bilateral creditors,”he said.
The State Minister said that country has shown a growth following a contraction of six consecutive quarters.“The country has shown a growth by third quarter of 2023 and fourth quarter we have shown a growth of 4.5 per cent. “It is a healthy sign in terms of the economy”, he said.
He said that the government has succeeded in increasing the tax revenue in the country. “The Government’s revenue has gone up to 11 percent of GDP and in 2023 that is a 8.1 per cent of government revenue.We expect to increase the tax revenue to 12 per cent of GDP by end of this year,”he said.
“We had the one of the lowest tax revenue in the world but when we embark this programme we gradually enhanced our tax revenue,” he said. Semasinghe elaborated the measures including removal of tax exemptions, taken by the government with an objective of increasing the tax revenue.
The State Minister stressed the importance of digitalising the tax structure.“With the recent initiative taken, we have already have 130 per cent growth in tax compliance, tax registration. That is a good number but we are not happy with it. We want everybody who needs to be taxed, to pay taxes.We want to increase government revenue in turn to strengthen the welfare of the citizens.
“Digitisation has been brought in which the successive governments have been striving for a long period without success,” he said. Semasinghe while stressing that the debt crisis is not the only reason that led to the economic crisis in the country stressed that the IMF programme is bearing fruit now. “We are also thankful to the people of Sri Lanka for remaining resilient during this difficult time,he said.
WB commends Sri Lanka’s progress in reforms
Finance State Minister Shehan Semasinghe said that World Bank South Asia Vice President Martin Raiser who he met in Washington on the sidelines of IMF-World Bank annual meetings, commended Sri Lanka on the progress made with steady implementation of World Bank supported reforms.
“The World Bank’s Vice President for the South Asia Region recollected the situation Sri Lanka was in just a few months ago, and opined that the country is in a far better position today,” the State Minister said. State Minister Semasinghe said that they discussed the forthcoming reforms that will unlock the next round of World Bank financing. He said that the WB Vice President assured continued support to Sri Lanka.
Raiser in a tweet said that he was glad to see progress Sri Lanka is making in economic recovery and financial sector stability.
He said that they discussed the need to continue critical reforms for recovery and sustainable growth, including in the areas of tax administration, financial sector, private investment and trade, ,women empowerment, as well as social protection.
Chaminda Perera