Sri Lanka’s parliament passed President Ranil Wickremesinghe’s interim budget for 2022 on Friday, a day after the IMF announced it would lend about $2.9 billion to help the crisis-hit country. crisis to overcome its worst economic difficulties.
The budget was passed with only 5 members voting against. Three Janatha Vimukthi Peramuna (JVP) lawmakers and two All Ceylon Tamil Congress MPs voted against the draft budget.
A total of 115 members of the 225-member assembly voted in favour, while the main opposition party, the SJB, abstained.
Wickremesinghe was aiming for tax reforms while providing relief to the most vulnerable groups affected by the ongoing economic crisis in the island nation.
The interim budget introduced a number of tax reforms relating to income tax, value added tax (VAT), telecommunications tax, and betting and gaming tax. The VAT rate will be increased to 15% from the current rate of 12% from 1 September this year.
It was only in June that the VAT went from 8% to 12%.
Wickremesinghe, who is also finance minister, said implementing these proposals will help increase revenue and gradually reduce the printing of money for government spending.
Sri Lanka is going through its worst economic crisis since its independence in 1948, triggered by a severe shortage of foreign exchange reserves.
The IMF said on Thursday it would provide Sri Lanka with a loan of about $2.9 billion over four years under a preliminary agreement to help the bankrupt island nation overcome its worst economic crisis and protect the poor. livelihoods of the people.
Sri Lanka, a country of 22 million people, plunged into a political crisis in July, after former President Gotabaya Rajapaksa fled the country following a popular uprising against his government for mishandling the country. ‘economy.
Rajapaksa was replaced by his ally Wickremesinghe.
The country is also expected to restructure its debt worth $29 billion, with Japan expected to coordinate with other creditor countries, including China, on this issue.
In mid-April, Sri Lanka declared default on its international debt due to the currency crisis. The country owes $51 billion in foreign debt, of which $28 billion must be paid by 2027.
There have been street protests in Sri Lanka against the government since early April over its mishandling of the economic crisis.
A crippling shortage of foreign exchange reserves has led to long queues for fuel, cooking gas and other necessities, while power cuts and soaring food prices have deepened misery Population. PTI CORR MRJ MRJ
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