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Wrapping up Sri Lanka external debt deals critical, property tax needed: IMF

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Sri Lanka’s economy is starting to recover under a stabilization program, and further progress has to be made on debt restructuring while monetary policy decisions have to be prudent to keep inflation down, an International Monetary Fund official has said.

“A swift completion of final agreements with official creditors and reaching a resolution with external private creditors remain critical,” IMF Senior Mission Chief Peter Breuer said after a staff visit.

“Building on the Central Bank of Sri Lanka’s success in taming inflation, future monetary policy decisions should remain prudent with a focus on keeping inflation expectations well anchored.”

The mission called for a speeding up a “progressive property tax”.

Swift progress towards the introduction of a progressive property tax is key to ensuring fair burden sharing while sustaining the revenue-based consolidation.

The full statement is reproduced below:

Colombo, Sri Lanka – January 19, 2024: An International Monetary Fund (IMF) mission team led by Mr. Peter Breuer visited Sri Lanka from January 11 to 19, 2024 to discuss recent macroeconomic developments and progress in implementing economic and financial policies under the EFF arrangement. At the end of the mission, Mr. Breuer issued the following statement:

“The economic reform program implemented by the Sri Lankan authorities is yielding the first signs of recovery. Real GDP recorded positive growth of 1.6 percent year-on-year in the third quarter of 2023, the first expansion in six consecutive quarters. Shortages of essentials have eased, and inflation remains contained. Gross international reserves increased by USD 2.5 billion during 2023, and preliminary data point to improved fiscal revenue collections during the fourth quarter of 2023. However, challenges remain as these improvements need to translate into improved living conditions for Sri Lanka’s people.

“In this context, sustaining the reform momentum and ensuring timely implementation of all program commitments are critical to rebuilding confidence and putting the recovery on a firm footing that will benefit all people. Swift progress towards the introduction of a progressive property tax is key to ensuring fair burden sharing while sustaining the revenue-based consolidation.

Tax policy measures need to be accompanied by strengthening tax administration, removing tax exemptions, and actively eliminating tax evasion to make the reforms more sustainable and to further build confidence among creditors to support Sri Lanka’s efforts to regain debt sustainability.

“Building on the Central Bank of Sri Lanka’s success in taming inflation, future monetary policy decisions should remain prudent with a focus on keeping inflation expectations well anchored. Against continued uncertainty, it remains important to continue rebuilding external buffers through strong reserve accumulation. Protecting the poor and the vulnerable through improved targeting and better coverage of cash transfers remains critical.

“To safeguard the stability of the financial sector and bolster its capacity to support economic growth, the authorities need to urgently finalize amendments to the Banking Act in line with their commitment under the IMF-supported program, implement the bank recapitalization plan and strengthen the financial supervision and crisis management framework.

“Following the publication of the IMF Governance Diagnostic report, it is now imperative for the authorities to adopt their own action plan for implementing the recommendations in the report beyond the priority commitments under the EFF arrangement. At the same time, ensuring an enabling environment for governance and transparency reforms to take place is key to bolstering public confidence and facilitating implementation of these important efforts.

“The authorities have made commendable progress with putting debt on a path towards sustainability. The execution of the domestic debt restructuring was an important milestone. A swift completion of final agreements with official creditors and reaching a resolution with external private creditors remain critical. Progress in meeting key commitments under the IMF-supported program will be formally assessed in the context of the second review of the EFF arrangement alongside the forthcoming 2024 Article IV consultation assessing Sri Lanka’s economic health.

“The IMF team held meetings with President and Finance Minister Ranil Wickremesinghe, Central Bank of Sri Lanka (CBSL) Governor Dr. P. Nandalal Weerasinghe, Speaker Mr. Mahinda Yapa Abeywardana, Minister Mr. Kanchana Wijesekera, Minister Mr. Wijeyadasa Rajapakse,State Minister Mr. Shehan Semasinghe, Secretary to the Treasury Mr. K M Mahinda Siriwardana, Governor of Northern Province Mrs. P.S.M.Charles, Governor of Eastern Province Senthil Thondaman, and other senior government and CBSL officials. The IMF team also met with Parliamentarians, representatives from the private sector, civil society organizations, and development partners.

“We would like to thank the authorities for the excellent collaboration during the mission, including during the mission’s visit to the Northern and Eastern provinces. This visit enriched the mission team’s understanding of the challenges as well as the potential of Sri Lanka. We reaffirm our commitment to support Sri Lanka for a full economic recovery from the crisis.”

(economynext.com)

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Landslide warnings for several areas

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The National Building and Research Organisation (NBRO) has extended the early landslide warnings issued to multiple areas in eight districts, as heavy rainfall continues in parts of the island.

The NBRO says that the warnings will be in effect until 4.00 pm tomorrow (Nov. 07).

Accordingly, a Level 1 (Amber) warning has been issued for several Divisional Secretariat Divisions (DSDs) and surrounding areas in the Badulla, Galle, Kalutara, Kandy, Kegalle, Kurunegala, Matara and Ratnapura districts as follows:

Badulla – Welimada, Haldummulla DSDs and surrounding areas
Galle – Elpitiya DSD and surrounding areas
Kalutara – Bulathsinhala DSD and surrounding areas
Kandy – Udapalatha and Yatinuwara DSDs and surrounding areas
Kegalle – Rambukkana and Mawanella DSDs and surrounding areas
Kurunegala – Polgahawela DSD and surrounding areas
Matara – Pasgoda, Akuressa and Kotapola DSDs and surrounding areas
Ratnapura – Godakawela, Imbulpe, Nivithigala, Openayake, Elapatha, Balangoda, Kalawana, Ayagama, Pelmadulla, Kiriella and Kahawatta DSDs and surrounding areas

Meanwhile, a Level 2 (Yellow) warning was issued for the following areas:

Kegalle – Deraniyagala, Ruwanwella, Dehiowita, Yatiyanthota, Kegalle, Galigamuwa, Bulathkohupitiya, Warakapola and Aranayake DSDs and surrounding areas

Ratnapura – Ratnapura, Kuruwita and Eheliyagoda DSDs and surrounding areas

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RW named respondent as court to review injunction against e-passport purchase

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Former President Ranil Wickremesinghe has been named as a respondent of the writ petition filed with the Court of Appeal challenging the previous government’s decision to purchase passports from two foreign companies.

Wickremesinghe has been named as a respondent of the relevant writ petition filed by Epic Lanka Private Limited, through a motion submitted by the petitioning party, when the petition was taken up before the two-member Appeals Court judge bench comprising Justices Mohammed Laffar and P. Kumaratnam today (06).

During the hearing, the attorneys who appeared for the two foreign companies named as respondents stated that their clients have been critically prejudiced through the interim injunction issued by the court preventing the purchase of 5 million e-passports.

The attorneys, who pointed out that the relevant injunction will be in effect until the hearings of the petition are concluded, requested the court to issue an order lifting the injunction.

Meanwhile, appearing for the petitioning party, President’s Council Viran Corea argued that the process of purchasing the passports in question has been carried out under an informal procurement system.

Furthermore, the President’s Counsel objected to the lifting of the injunction issued, requesting for an expedited conclusion of the hearing of the petition and for a final verdict to be issued.

Following the consideration of the facts presented, the bench ordered the petitioning party to file objections related to the request to lift the injunction preventing the purchase of passports. 

Later, the case was also ordered to be recalled on December 09 for the consideration of facts on whether or not the injunction should be lifted.

The petition has been filed by Epic Lanka Private Limited seeking an order invalidating the decision taken by the previous government to purchase 750,000 normal passports and 5 million e-passports from two foreign firms.

(adaderana.lk)

(Except for the headline, this story, originally published by adaderana.lk has not been edited by SLM staff)

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Prime Minister meets Anti Corruption officials of ICC

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Prime Minister Dr. Harini Amarasuriya recently met with key figures from the International Cricket Council (ICC) Anti-Corruption Unit (ACU), including Mr. Sumathi Dharmawardena, President’s Counsel, the newly appointed Independent Chair of the ICC ACU, and Mr. Alex Marshall, (CBE, QPM) General Manager of Integrity and Human Resources, ICC.

During the discussion, Mr. Alex Marshall noted Sri Lanka’s progress in combating corruption in cricket over the past seven years, emphasizing the importance of player education and strengthening the Ministry of Sports’ Special Investigations.

The meeting was also attended by Mr. Andrew Ephgrave, Senior Manager, of ICC ACU Operations; Mr. Vije Bandara, Senior Attorney and Director General of Legal at the President’s Office; Mrs. Illeperuma, Additional Secretary at the Ministry of Sports; and Prof. Shemal Fernando, Director General of Sports.

(Prime Minister’s Media Division)

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