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SJB demands IMF agreement be made public

05 Sep 2022

  • Table staff-level agreement in Parliament tomorrow, Harsha urges President
  • Says reforms must be made protecting poverty-stricken communities
  • Claims primary surplus target unrealistic
  • Call follows similar demand by JVP
BY Buwanajee Coralage    The main Parliamentary Opposition, Samagi Jana Balawegaya (SJB), has called on President Ranil Wickremesinghe to table in Parliament the staff-level agreement reached between the Government and the International Monetary Fund (IMF), and to ensure that the reforms and restructuring necessary to revive the economy be carried out causing minimal hardship to the most vulnerable segments of the population. Addressing the media yesterday (4) SJB MP and Committee on Public Finance (COPF) Chairman Harsha de Silva said that he was unaware of the contents of the agreement with the IMF. “We urge the President to reveal the agreement signed with the IMF in Parliament on 6 August. We are still not aware of the particulars of this agreement. I, as the COPF Chairman, and my team, have a huge responsibility as to how these reforms and restructuring can be brought about without raising more concern and alarm among the general public, and especially among the poverty-stricken in society. Though this is a highly concerning matter, we will approach this in a manner as to cause minimal damage to the general public,” said de Silva.  Last Saturday (3), former Janatha Vimukthi Peramuna (JVP) Provincial Councillor Wasantha Samarasinghe too demanded the President reveal the conditions the Government of Sri Lanka had agreed to in the IMF staff-level agreement. “Why is the agreement not tabled in Parliament? Why are you not revealing this to the country? The world must know what the Sri Lankan Government has agreed to,” he demanded. Dr. Harsha de Silva said yesterday (4) that the President’s plan to increase the primary balance of the Budget, which is currently at negative 6 to a value of positive 2.3 by 2025, seems like an impossible aim. “Our primary account balance has always been negative other than on rare occasions in the 1950s and in 2017 and 2018 under former Finance Minister Mangala Samaraweera. This balance reveals whether a Government is able to sustain its economy without obtaining loans. This will be calculated by deducting the addition of national expenditure including capital expenditure and interest on loans by the national gross income. During the rule of former President Gotabaya Rajapaksa, the value which was at about (plus-1.5) during the time of former Minister Mangala Samaraweera, declined to minus-6.  “We have heard that the President along with the Government has agreed to bring this up to a value of plus-2.3. Actually, after hearing this, I was astounded as to how such a large transformation can be brought about. They have mentioned the time frame as 2025, but this has not yet been informed to the Government nor to the COPF. This would be a very difficult feat,” he said. Elaborating on this, he said that, with inflation exceeding 60%, the Government is at an advantage when considering the gross domestic product (GDP) and primary deficit ratio on a year-on-year basis, but noted that to achieve this, Government revenue would have to be increased exceedingly, as the country already has only a limited causes of expenditure that could be eliminated. He said that this would mean that the expenditure for development would be completely cut off along with decreasing capital expenditure.  Furthermore, he said that the 12-15% value-added tax (VAT) increase would be further increased by a turnover tax, named the social security tax, implemented by former Finance Minister Basil Rajapaksa, which would comparatively add another 4.5% to the VAT already in place, totalling VAT at 19.5%.

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