Ranil Defends  VAT Increase

Ranil Defends VAT Increase

President Ranil Wickremesinghe firmly defended the recent revision of value-added tax (VAT) in Sri Lanka, despite acknowledging the resulting rise in fuel costs. He emphasized the government’s unwavering commitment to a comprehensive economic strengthening program.

Drawing parallels to Lebanon’s delayed economic program and Greece’s prolonged recovery, Wickremesinghe highlighted his determination to avoid drastic measures like public sector wage cuts. He stressed the need for timely and essential decisions to fortify the nation’s economy.

President Wickremesinghe set an ambitious target of achieving a 3% economic growth rate in 2024, with aspirations for even faster progress in the future. He addressed concerns about debt servicing by emphasizing the importance of diversifying income sources and ensuring sustainable recovery. The President revealed a plan to increase government revenue from 12% of GDP in 2023 to 15% by 2026, with a target of Rs. 4.2 trillion in 2024. This, he explained, necessitated the VAT revision.

Acknowledging the challenges associated with these decisions, Wickremesinghe emphasized the crucial responsibility to avoid a repeat of the past economic crisis. He made these remarks at the opening ceremony of the new Air Force Headquarters in Battaramulla on Monday.

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