Comments /3379 Views / Tuesday, 10 January 2017 00:47
Finance Minister Ravi Karunanayake has been selected as the Finance Minister of the Year for Asia-Pacific by the prestigious The Banker magazine for his efforts to steer Sri Lanka into a new era of economic reform and a change of mindset.
The Banker says Karunanayake secured a $ 1.5 billion International Monetary Fund (IMF) loan program that the country needed to avoid a balance of payments crisis, replenish reserves and rebuild confidence among international investors.
“We were not desperate to go to the IMF. But [to others], securing an IMF loan [is a mark of] financial discipline, so our prime objective was achieved. We wanted to show that it is best to have abundance of prudence,” says Karunanayake.
Sri Lanka’s latest bond issues in the international capital markets suggest Karunanayake has indeed reached his objective. In 2015, the sovereign issued a $ 1.5 billion dual-tranche note – its largest since 2007. A year later, it printed a second bond of the same size, with order books of $ 6.6 billion, despite market volatility after the UK voted to leave the EU.
In line with the IMF program, Sri Lanka is also working towards fiscal consolidation. Sri Lanka’s budget deficit has dropped from 7% when Karunanayake took office in January 2015 to 5.6% in 2016 – just below expectations.
After a visit in September 2016, the IMF said Sri Lanka’s tightening of fiscal and monetary policies has been effective and that it met the IMF program’s targets through to the end of June 2016.
Meanwhile, Sri Lanka’s total government revenue grew from Rs. 1,195 billion ($ 8 billion) in 2014 to Rs. 1,455 billion in 2015. Tax revenue rose from Rs. 1,050 billion to Rs. 1,356 billion in the same period. This is crucial for Sri Lanka, which has a very low tax revenue-to-gross domestic product ratio.
To raise tax revenue further, Parliament has passed a bill to increase value-added tax from 11% to 15%. Karunanayake is also keen to continue simplifying the tax system as well as change people’s mindset towards taxes.
“We have inculcated in the minds of the people that paying taxes is not something bad, but a must for the country. Every person needs to pay a reasonable charge instead of relying on the Government for everything,” he says. As a result, Sri Lanka’s tax records have grown from having 700,000 files in January 2015 to having 1.4 million today. (Colombo Gazette)
24 August 2017
The Kandy Expressway, also known as the Northern Expressway and the Central Expressway (name keeps on changing), was first proposed in the early 1990s, taking a route over the Kelani River’s northern flood plain and was challenged over...
24 August 2017
One of the Jathaka stories, the ‘Bhimasena Jathaka,’ enlightens modern-day organisations on talent management and about creating the right culture for organisational sustainability With rapid digital ada...
23 August 2017
This is my response to the unscientific blabbering of an article by an archaic old man called Chandre Dharmawardana, published in Daily FT on 10 August. According to his Wikipedia page, Chandre lives in Canada and is a Canadian citizen. As...
23 August 2017
There are unconfirmed reports stating that the AG’s Department has cleared 28 files pertaining to corruption and fraud for taking legal action. According to the information the hedging issue is not among them. It is history now as to how i...