Sri Lanka tax reforms, economically sound budget awaited by IMF

May 04, 2010 (LBO) – The International Monetary Fund is looking for an economically sound budget for Sri Lanka this year with tax reforms to cut the deficit as it starts discussions to resume a deal with the island, an official said. Sri Lanka’s government got parliamentary approval to spend money until April amid two elections through a ‘vote on account’.

Reports have said that authorities may continue to spend money under a presidential directive until June, though a new parliament has now been elected.

Mini-budget

A ‘mini-budget’ is expected to be presented to parliament at that point, with spending and revenue proposals for the balance period, which the IMF is keen to see. A vote on account only deals with the expenditure side of the budget.

“The mini-budget should contain full year budget estimates and thus transparently present the picture for 2010 as a whole,” IMF’s resident representative in Colombo Koshy Mathai said.

“We will be conducting a qualitative assessment. We are looking for a good budget with some serious commitment to contain the fiscal deficit and good tax reforms – basically what economists would agree is an economically sound budget.” An IMF mission is due on May 12 to discuss S