The National People’s Power (NPP) government has negotiated with the International Monetary Fund (IMF) to secure unprecedented facilities in the latest budget, offering benefits that the public did not request or expect, according to Deputy Minister of Industry and Entrepreneurship Development, Chaturanga Abeysinghe.
Speaking on a political discussion broadcast on Derana TV, Abeysinghe emphasized that the increase in taxes was not done for the government’s benefit, but rather as part of a long-term economic strategy. He stated that taxes have not been raised for pleasure, but as outlined in the government’s policy, the goal is to gradually reduce fuel and energy costs while building a productive economy. However, due to the crisis in collecting 15.1% of state revenue, certain tax reforms have been introduced. The government has expanded the tax net, introducing withholding tax and imposing a 15% tax on the digital economy to increase state revenue. The government aims to bring all income-generating professionals, including doctors, lawyers, and business owners, under the tax system.
Abeysinghe explained that once the country has a strong tax base, the per capita tax burden can be gradually reduced. He added that indirect taxes could also be decreased, and a mutual understanding has been reached between the government and the IMF regarding these measures. He urged professionals and the public to recognize the financial situation of the country and understand how far Sri Lanka has come.
He further stated that last year, if the government had made requests, it was advised to negotiate with the IMF. Now, after discussions, the government has secured unexpected facilities in the budget as both capital and current expenditures. He called on the people to make small sacrifices, adding that politicians have already made the maximum sacrifice. He warned that if the people do not support these measures collectively, the country will not get another opportunity to recover.
The government maintains that while these decisions may be difficult in the short term, they are necessary to build a sustainable economy. The ultimate goal is to reduce the overall tax burden and improve the economic conditions of the country in the long run.
