19 October 2024 12:06 am Views - 60
By Yohan Perera
Former MP and former Chairman of the Committee on Public Finance Harsha de Silva said the electoral pledge made by the National People’s Power (NPP) in the political platform has proven to be unrealistic.
Dr. de Silva told a media briefing that the only option available for the government is to borrow funds from financial markets.
“NPP said during the election that borrowings will be reduced or stopped if they come to power. However, the present government has been compelled to borrow from the market almost every week as there is no other way to raise funds. Sri Lanka has to maintain a primary account surplus. This is in line with the Public Finance Management Bill. The accepted norm is that primary account surplus could be used to settle loans. Therefore, the government will have to generate funds to settle loans if the primary account surplus is insufficient. There are two ways in which the government could raise funds. One is to borrow from the market and the other is to print money. It is not possible to print money as per the agreement reached with the IMF. Therefore, the only option available is to borrow from the market. This is what the government is doing now. The government is unable to fulfil the promise it made at the political platform,” the former MP said.
Meanwhile, SJB Leader and former Opposition Leader Sajith Premadasa questioned as to whether the new government has discussed the tax cuts with the IMF and as to when it will be introduced.
“Those in the NPP government met the IMF officials recently. We would like to know whether the government discussed the revision of direct and indirect taxes with the IMF officials,” Mr. Premadasa questioned during a public gathering in Avissawella.
“We in the opposition had a dialogue with the IMF officials during the recent past. We told them that taxes would have to be reduced if the people endorsed our policy of reducing the tax burden at the Presidential Election. IMF officials ensured that they would have to agree to tax cuts in line if Sri Lankan people gave a mandate for it. We will come up with the same pledge at the General Election as well. We will work out a tax relief package for the people with IMF if our party obtains a majority in the House. Therefore, people have one more opportunity of enjoying a tax relief,” he said.