Sri Lanka to energize and revive economy and attract investments through series of tax cuts
A senior official of the government of Sri Lanka has reportedly stated that Sri Lanka’s economic activity will pick up following a series of tax cuts implemented by the administration and the expansion of economic activity is expected to boost Gross Domestic Product (GDP) growth to reach 6.5 percent from 2020 onwards.
“Sri Lanka’s new government headed by President Gotabaya Rajapaksa in the short-term has to energize and revive the economy, get the businessmen going and attract investors while guiding the country towards a prosperous future,” Ajith Nivard Cabraal, senior advisor to Sri Lanka’s Prime Minister Mahinda Rajapaksa and former Governor of the Central Bank of Sri Lanka has told LBO.
“Our target includes achieving a 6.5-percent economic growth per annum on average from 2020 onwards for the next five years,” he has said, adding, “This will be a tough call, though.”
“We used to have this kind of growth on a routine basis during the Mahinda Rajapaksa era but the people did not realise this was happening. Only in the last five years when it was not happening the people realized and started to question,” Cabraal has further stated.
“So this needs to be done without upsetting the macro fundamentals any further and if at all make it stronger; the reserves, debt and interest rates need to be managed in way that it supports the growth of the economy.”
According to the economic advisor, revenue had declined, inflation, unemployment and the Cost of Living has gone up in the past five years and the economy has lacked stability.
“The government will accelerate growth and ensure all stakeholders are safe. We are looking at particularly revitalizing the tourism and port sectors,” Cabraal has said.
OSL take:
The decision of the government of Sri Lanka to revive the economy through tax cuts has resulted in an increase in economic activity. Through the move the government is looking at giving an impetus to the economy and push further activity. The economic movements in Sri Lanka has opened up many business opportunities in the country. Also, Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country and the many trade agreements as well as trade concessions enjoyed by the country have made it an attractive business destination in the South Asian region.
| Article Code : | VBS/AT/16122019/Z_5 |