Taxes should be paid more by those well off - IMF

COLOMBO (News 1st); The International Monetary Fund says it will lend funds to Sri Lanka if it makes progress toward debt sustainability.

"We at the IMF are very concerned about Sri Lanka and trying to work on finding as faster as a possible solution for the country. The most important issue is to find a credible and coherent macroeconomic strategy that addresses the key risks in the country," said Anna-Marie Gulde Wolf, the Acting Director (Asia and Pacific Department) of the International Monetary Fund.

She said that this would include on the fiscal side, a revenue-based consolidation strategy that increases the country's ability to raise revenue and address most critical spending needs.

She stressed that the monetary policy has to be tightened to keep inflation in check.

"We see a need for a flexible exchange rate. Fiscal policy has to be formulated in a way that protects the livelihoods of the most vulnerable."

She further said that taxes should be paid more by those that are well off.

"We have received a program request from Sri Lanka and we have had very good fruitful technical discussions on preparations for the negotiations with authorities over the past week.

"Debt in Sri Lanka is assessed as unsustainable. We, therefore, welcome the authorities' intent to engage with their creditors.

The requirement for fund lending will be that progress towards debt sustainability and the first step on this has been taken by authorities," she added.