COLOMBO: Sri Lanka made the announcement on Tuesday of a significant increase in the goods and services tax, a direct response to the International Monetary Fund’s decision to withhold a portion of a bailout loan due to Sri Lanka’s inability to attain its revenue targets.
The island nation had grappled with an extraordinary economic crisis, leading to a default on its $46 billion foreign debt last year. In the wake of this dire financial situation, the government has undertaken substantial measures, such as imposing steep tax hikes and curtailing generous consumer subsidies, all in alignment with an IMF-sanctioned rescue plan.
Government spokesperson Bandula Gunawardana affirmed that another tax hike was imperative due to the IMF’s decision to withhold a $330 million loan tranche, primarily because Sri Lanka’s tax revenue still fell short of covering its expenditures.
By AFP
