Efforts to increase tax revenues should be pursued in a growth-friendly manner while protecting the poor and vulnerable people, says Peter Breuer, the IMF Asia & Pacific Department’s Senior Mission Chief for Sri Lanka.
His remarks came during a special virtual press briefing held this morning (March 21) on the IMF-supported 48-month extended arrangement under the Extended Fund Facility (EFF) program of SDR 2.286 billion (approximately USD 3 billion) for Sri Lanka.
The executive board of the International Monetary Fund green-lighted this extended arrangement on Monday (March 20).
Now that the IMF’s board approval is received, Sri Lanka will immediately receive an initial disbursement of USD 333 million (amounting to SDR 254 million) from the EFF arrangement, which is expected to catalyze a new external financing including from the ADB and the World Bank, Breuer said further.
The Senior Mission Chief underscored that the tax reforms implemented under the EFF program are designed to be progressive, meaning that greater contributions are made by high income earners.
Attributing the island nation’s severe crisis to the past policy missteps and economic shocks, Breuer commended the Sri Lankan authorities for implementing challenging policy actions to ride out the crisis situation.
He said it is now essential to continue the ‘reform momentum’ under strong ownership by the authorities and the Sri Lankan people more broadly.
