Sumanthiran questions rationale behind raising VAT to 18 % instead of raising withholding tax 

By Saman Indrajith

TNA Parliamentarian M.A. Sumanthiran said yesterday that the government had agreed to provide copies of the Technical Assistance Reports compiled by the International Monetary Fund (IMF) to Opposition party leaders on request.

Sumanthiran, who was the only member of the Opposition to attend a multi-party discussion with the IMF, on the invitation of President Ranil Wickremesinghe, said that he had accepted the invitation extended by the President to Opposition party leaders.

“I raised some of our concerns. Firstly, the absence of transparency. The IMF provides Technical Assistance Reports to the government. These reports contain analysis on why these recommendations are made. They have so far not been made public. Today, it was agreed that copies would be provided to me and to other Opposition party leaders, too, on request,” Sumanthiran told The Island.

“With this we can see if these recommendations have an analytical basis or not. Upon studying the reports, we can say whether to support the IMF programme or not. We can see at the moment that the IMF programme is not beneficial to the poor of this country.” Sumanthiran said that he had questioned the rationale behind certain revenue-raising measures, such as the decision to increase the VAT to 18% instead of raising the withholding tax rate, which would have had a more immediate impact on revenue generation.

Sumanthiran said that he had highlighted the government’s failure to address 15 prior action items identified in the IMF programme, which were supposed to be completed by February 2024. In response, the government cited discussions with the IMF that resulted in time extensions for these actions,

The main Opposition SJB and the JVP/NPP boycotted the meeting.

Meanwhile in a statement, the President’s Media Division said that during the discussions, Secretary to the Treasury Mahinda Siriwardana had provided insights into the ongoing negotiations with bilateral creditors, commercial creditors, and ISBs, with an optimistic outlook towards completing the process by the end of June this year.

Central Bank Governor Dr. Nandalal Weersinghe highlighted the government’s efforts to adhere to the recommendations outlined in the Governor’s diagnostic report, emphasizing the commitment to a structured roadmap for implementation.

President Wickremesinghe affirmed the government’s willingness to make these technical assistance reports available to the members of Parliament and invited Sumanthiran and other Opposition members to attend a meeting and engage with the IMF to further discuss the proposals.

In response, Sumanthiran expressed his readiness to participate constructively in the dialogue, pledging support for constructive measures while highlighting areas that warrant attention and rectification.

Also present at the meeting with President Ranil Wickremesinghe were Prime Minister Dinesh Gunawardena, Leader of the House Susil Premajayantha, State Ministers of Finance Shehan Semasinghe and Ranjith Siyambalapitiya, Senior Advisor to the President on National Security and Chief of Presidential Staff Sagala Ratnayaka and Secretary to the President Saman Ekanayake, according to the PMD.