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, IMF Mission Chief Jaewoo Lee told a press conference in Colombo

Commencing the legislative process for the new Inland Revenue Act would be an important step in rebalancing the tax system toward a more predictable, efficient and equitable structure and in generating the needed resources in support of the country’s ambitious social and development objectives, he added.

The IMF mission who concluded the first review of the Government’s economic program welcomed the Central Bank of Sri Lanka’s (CBSL) move to preemptively raise policy rates to maintain inflation within its target band.

In light of easing external pressures, the mission encouraged the CBSL to continue its effort to rebuild international reserves and maintain exchange rate flexibility to further develop the foreign exchange market.

“The mission also insisted the government to make concerted efforts in implementing structural reforms in public financial management and state owned enterprises, building on the substantial technical assistance received over the years.