Crisis-hit Sri Lanka’s cabinet has approved a proposal by Prime Minister Ranil Wickremesinghe to amend several laws, including domestic revenue, VAT, telecommunications taxes, betting and gambling, to increase state revenues 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 corporation tax, as well as to reduce the tax base of the tax on value added and income tax, resulting in a significant drop in state revenue, according to an official statement.
To boost revenue, the Council of Ministers at a meeting held on Monday approved a proposal put forward by Prime Minister Wickremesinghe, who is also the country’s finance minister, to amend several Acts of Parliament on domestic revenue, VAT , levies on telecommunications, betting and gaming. . The island, facing its worst economic crisis since gaining independence from Britain in 1948, has appealed to the International Monetary Fund (IMF) for a bailout.
In April, the two sides convened their first round of talks at the headquarters of the International Monetary Fund in Washington. Sri Lanka is hoping for a Rapid Financing Facility (RFI) as well as an Extended Financing Facility (EFF) from the international financial body to help it deal with its foreign exchange shortages, which have triggered an economic crisis.
At the last meeting, the IMF assured to help the country with an amount of 300 to 600 million dollars. On April 12, Sri Lanka suspended debt service for the first time in its history.
The economic crisis has also sparked political unrest with a protest occupying the entrance to the president’s office demanding his resignation which has been going on for more than 50 days.
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