Ali Sabry says no choice but to hike the country’s sales tax

Finance minister Ali Sabry has mentioned in an interview with the BBC that the current level of VAT is “definitely not sustainable” for a country like Sri Lanka that is dependent on the imports of essentials and the rate should be raised to 13% or 14%.

He admitted that the government made a mistake when it almost halved the rate of value added tax (VAT) to 8% in 2019 and the government had waited too long before calling on the IMF for help.

He has said that in order to find a way to bridge the revenue gap and expenditure, they have to increase the taxes.

He also said the nation needs $4bn over the next eight months to pay for imports of daily essentials.