Relaxation of all import restrictions is to address the revenue shortfall concern raised by the International Monetary Fund (IMF), State Minister of Finance Shehan Semasinghe said.

Speaking to TV Derana on Sunday (1), The subject minister said that Sri Lankan authorities are looking to find alternate measures to address the revenue shortfall concern of the IMF programme, as the first review discussions of the Extended Fund Facility (EFF) between the two parties continue. 

“Once we relax import restrictions by next month (November), we will be able to get additional revenue,” he said, highlighting the fact that the restrictions on vehicle importation will not be relaxed at present. 

Last week, at the IMF mission press conference in Colombo, IMF Mission Chief Peter Breuer said that there is no fixed timeline for disbursing the second tranche, as two important issues have to be sorted out with the Sri Lankan authorities, such as the tax reforms and policies to achieve the 2024 tax target and a clear path on Sri Lanka’s external debt restructuring process.

Further, the statement issued by the IMF said that although the authorities have met the programme’s primary balance targets and remain committed to this important pillar of the programme so as to support their efforts to restore debt sustainability, revenue mobilisation gains – while improved relative to last year – are expected to fall short of initial projections by nearly 15% by year-end, in part due to economic factors. 

The IMF recommended that it is important to strengthen tax administration, remove tax exemptions, and actively eliminate tax evasion to increase revenue and signal better governance.

Further, State Minister Semasinghe said that the Government has not achieved the required tax base enhancement as anticipated and added that the Revenue Administration Management Information System (RAMIS) system of the Inland Revenue Department (IRD) will be further strengthened by upgrading the system within the next couple of weeks to eliminate human interaction between the tax authorities and the taxpayers. 

“Once we are done with these measures, we will get the anticipated revenue because the downtrend of the government revenue was one of the key concerns of the economic crisis,” he said.