Written by Staff Writer
29 Jan, 2019 | 8:39 pm
Colombo (News1st): The International customs day 2019 was held in Colombo last evening (Jan 28). Speaking at the event Central Bank Governor Dr. Indrajit Coomaraswamy noted that the only way Sri Lanka can escape its current account deficit is through increasing exports and export transformation.
He noted that this year Sri Lanka is expected to pay about USD 5.9 billion, foreign debt and even though the country has plans to pay the debt, essentially what is being done is buying time. Coomaraswamy added even to buy time foreigners must have enough confidence to lend money to the country. He noted that institutions such as the IMF are important to keep rolling over the debt.
State Minister of Finance Eran Wickremeratne stated that whilst imports have grown customs revenue, particularly in the last period, hasn’t grown at the same pace. He added that their expectation is to at least see a 20% increase in customs revenue as a minimum target in 2019.
He said this year Sri Lanka has the highest ever debt payments and it’s not about politics, it is about investments and returns. He went onto note that when they make these decisions there are always repercussions. The state minister noted that what they cannot collect through tax revenue ends up adding to the country’s debt burden because the expenditure levels are reasonable. He said the revenue levels are the current problem.
With all due respect to the State Minister, revenue doesn’t only derive from exports. If proper incentives are provided and properly managed, we will have the necessary revenue to meet any contingency. Additionally, Central Bank bond scam apart from being the largest financial fraud ever has had a huge negative impact on the country’s economy.
The Central Bank went through a typical western movie style bust. In spite of team News 1st pointing out the need for an inquiry including a forensic audit on the 2nd bond scam, the Central Bank has not yet presented a report. How do you then expect to boost investor confidence in the country?
We must remind the general public of the overwhelmingly great effort made by the Government to sign Free Trade Agreements, with or without the concurrence of the Attorney General’s Department. It follows that, FTAs that are ill thought out and poorly negotiated upon, results in lower tax collection by the Customs.
There was a school of thought, that greater imports would help increase revenue collection. However, this notion has also suffered thanks to the rising value of the dollar.
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