VAT amendment delay threatens IMF’s second tranche

The disbursement of the second tranche of a IMF 1.5 billion dollar Extended Fund Facility (EEF) this year might be under threat if there is a delay in passing the VAT amendment Draft bill in parliament.

IMF mission Chief Jaewoo Lee told reporters conference in Colombo on Friday that the government should expedite the legislative process of implementing the VAT amendments that are needed to support revenue targets for 2016 and 2017.

The 2017 budget should also be underpinned by a well–crafted and high quality tax policy strategy to raise Sri Lanka’s low tax revenue –to-GDP ratio, he said adding that the government should focus more on direct taxes rather than depending on indirect taxes.

He commended the legislative process for the new Inland Revenue Act which would be an important step in rebalancing, the tax system.(Bandula )