A Sri Lankan delegation held discussions on taxes and revenue targets with the International Monetary Fund (IMF) during a recent visit to the IMF headquarters in the United States, according to Minister Vijitha Herath. The talks focused on existing taxes, including Value Added Tax (VAT), other revenue streams, and strategies for achieving set revenue targets.
Minister Herath clarified that no final decisions were made during the discussions. As part of its ongoing financial reform efforts, Sri Lanka is required to develop a 2025 budget that meets specific revenue and primary balance targets by June 2025—key performance criteria for advancing the next staff-level agreement with the IMF.
The IMF has emphasized the importance of increasing revenue rather than focusing solely on spending cuts, although cuts could also contribute to managing the primary deficit. Initially, a review was scheduled for June 2024 data, but it was delayed due to recent elections.
The current program requires that certain revenue-boosting measures be approved to align with the IMF’s parameters. Additionally, the new administration is planning a vote on account while preparing the budget for the coming year.