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Sri Lanka making progress on tax, urged to speed up reforms: IMF

ECONOMYENXT – Sri Lanka is making good progress on tax collection and new taxes announced in a budget for should bring more revenues the International Monetary Fund has said, but other reforms involving computerisation of revenue and spending and state enterprises remain.

Jaewoo Lee, IMF’s mission chief for Sri Lanka said indicative tax revenues seem to have exceeded targets slightly in September, after June targets were met.  The IMF’s board approved a tranche disbursement based on June performance.

The central bank also met June quantitative targets. However forex reserves remain under pressure partly due to foreign bond outflows in the second half of the year.

An IMF report said by September the primary deficit (before interest costs) was 35 billion rupees, which was 50 billion rupees better than the target. Tax collections on provisional data was 46 billion rupees better than target.

"Besides meeting quantitative policy targets, steadfast implementation of wide ranging
fiscal and structural reforms is urgently needed to keep the program on track through 2017," an IMF report said.

Getting an investor for state-run SriLankan Airlines (delayed from September to December), market pricing fuel and electricity (December), rolling out computerised tax and expenditure management and measures to fix state enterprises remain.

Many of the so-called structural benchmarks have to be implemented by December, but the month is now almost half gone. (Colombo/Dec10/2016)

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