Courtesy India Today

On Friday, a senior Sri Lankan official indicated serious fiscal reforms that the country may take to revive its economy, which faces an unprecedented slump in decades.

By Press Trust of India: Cash-strapped Sri Lanka will have to undertake serious fiscal reforms to revive the ailing economy as it has identified a huge gap between the state’s revenue and expenditure, a senior official said on Friday.

Addressing a seminar, Secretary to the Treasury Mahinda Siriwardena said, We have an average monthly income of 145 billion rupees where the monthly expenditure amounts to 157 billion.” He said the monthly state pay bill was 93 billion with another 27 billion for pensions. With the cost of the poor relief, social welfare costs, and capital expenditure of 11 billion there would be a revenue shortfall.

We are made to borrow to finance the gap. This is why fiscal reforms were needed to bring down expenditure and raise revenue”, Siriwardena stressed. The government has been facing opposition to its anticipated tax reforms which would see drastic rises in personal income taxes from employment. All salaries exceeding 100,000 per month are to be taxed at higher bands.