IMF Experts Study New Draft Bill

  • Second loan review subject to completion of prior action

By Amavasya Sirisena

Legal experts of the International Monetary Fund (IMF) are still analyzing the contents of the new draft bill on the Inland Revenue Act before deciding on the completion of the second loan review in June.

William Murray from the Communications Department of the International Monetary Fund said that the second loan review is subject to completion of a prior action by the authorities, which is submission of the Inland Revenue Act to Parliament.

“We had a staff level agreement in Sri Lanka on May 3rd, last week. We noted in announcing that agreement that it’s subject to completion of a prior action by the authorities, which is submission of the Inland Revenue Act to Parliament. And that was a prior action that was agreed earlier this year. Our legal experts are still analyzing the content of the new draft bill, and are in discussions with the Sri Lankan authorities. That’s where we stand at the moment on Sri Lanka,” he said.

The IMF announced earlier this month that it had reached a staff-level agreement with Sri Lankan authorities on the second review under an economic reform program supported by a three-year Extended Fund Facility arrangement.

The IMF said that after constructive discussions with the authorities during the visit to Colombo in March, and more recently during the Spring Meetings, an IMF staff team reached a staff-level agreement with Sri Lankan authorities on the second review under an economic reform program supported by a three-year Extended Fund Facility arrangement, subject to the completion of a prior action by the authorities and the approval of the IMF Executive Board.

The Board is expected to consider Sri Lanka’s request for completion of the second review in June 2017, by which time the new Inland Revenue Act is expected to be submitted to Parliament as a prior action. The new law should pave the way for a durable fiscal consolidation based on revenue mobilization—a key pillar of the government’s reform program.

 

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