Changing the proportion of GDP that is taken as state level tax from 8.4 to 15.1 in in 3 years in a troubled economy sounds like crazy economics.
IMF to closely discuss upcoming budget with Sri Lanka
The International Monetary Fund will have close discussions with Sri Lanka on the budget for 2025, Senior Mission Chief Peter Breuer said after striking a staff level agreement on the next phase of the program.
The IMF program’s fiscal quantitative targets on revenues, primary balance are based on the budget measures and legal reforms are also usually announced in the budget.
Sri Lanka’s budget, usually presented in November was delayed due to the Presidential and Parliamentary elections.
“We will be interested in convincing ourselves that this budget is in line with the program objectives,” Breuer said. “So we will be having a very close discussion with the authorities on that.
Sri Lanka’s new administration has said it wants to raise the threshold on income tax, exempt some foods from value added tax and raise subsidies for people hit by the high prices from currency collapse (flexible exchange rate).
Sri Lanka however has some crippling import duties which has made basic foods like rice among the most expensive in the world.
Sri Lanka has agreed to keep within the guardrails of the program involving revenues and the primary balance.
“…[W]e have managed to reach a staff level agreement on the basis of a way forward that stays within the guardrails of the programme but at the same time allows the authorities an opportunity to make amendments in line with their priorities and they will put these in their budget proposals at the appropriate time.”
President Anura Dissanayake has said that the budget would be presented in February and passed by mid-March.
The IMF program is projected year end revenues of 13.6 percent of gross domestic product and 15.1 percent of GDP in 2025. Analysts are expecting 13.8 percent of revenue this year and strong revenues once car imports are liberalized.
IMF to closely discuss upcoming budget with Sri Lanka
The International Monetary Fund will have close discussions with Sri Lanka on the budget for 2025, Senior Mission Chief Peter Breuer said after striking a staff level agreement on the next phase of the program.
The IMF program’s fiscal quantitative targets on revenues, primary balance are based on the budget measures and legal reforms are also usually announced in the budget.
Sri Lanka’s budget, usually presented in November was delayed due to the Presidential and Parliamentary elections.
“We will be interested in convincing ourselves that this budget is in line with the program objectives,” Breuer said. “So we will be having a very close discussion with the authorities on that.
Sri Lanka’s new administration has said it wants to raise the threshold on income tax, exempt some foods from value added tax and raise subsidies for people hit by the high prices from currency collapse (flexible exchange rate).
Sri Lanka however has some crippling import duties which has made basic foods like rice among the most expensive in the world.
Sri Lanka has agreed to keep within the guardrails of the program involving revenues and the primary balance.
“…[W]e have managed to reach a staff level agreement on the basis of a way forward that stays within the guardrails of the programme but at the same time allows the authorities an opportunity to make amendments in line with their priorities and they will put these in their budget proposals at the appropriate time.”
President Anura Dissanayake has said that the budget would be presented in February and passed by mid-March.
The IMF program is projected year end revenues of 13.6 percent of gross domestic product and 15.1 percent of GDP in 2025. Analysts are expecting 13.8 percent of revenue this year and strong revenues once car imports are liberalized.
