Central Bank Governor Dr. Nandalal Weerasinghe said that the program to recover Sri Lanka from the current economic crisis has now reached a critical juncture and in present circumstances, there is no alternative other than getting the assistance of the International Monetary Fund.

He said that the negotiations with the International Monetary Fund were successful and now it is necessary to get a certificate of loan deferment from the parties who have given commercial loans, without which the IMF relief would not be received.

Central Bank Governor Dr. Nandalal Weerasinghe said in an interview with Presidential Media Director General Dhanushka Ramanayake that tough decisions have to be taken to get the country free from the current inflationary pressures.

He pointed out that tax revisions, increase in interest rates etc. were some of the tough decisions taken to get rid of the inflationary situation. He also said that tax revisions and other reforms combined with debt restructuring are parts of the process of stabilizing Sri Lanka’s economy.

Noting that 80% indirect tax and 20% direct tax should be evolved to 60% and 40%, respectively, in order to provide relief to low-income groups, the Central Bank Governor proposed to continue the tax regime for at least one year.

“If the current tax policy is implemented for at least one year, and if the economy stabilises as expected from next year, the tax revenue will definitely be higher than we think,” Dr. Weerasinghe stated in that interview.

“People with higher incomes should contribute more, thereby giving relief to those with lower incomes,” he said, pointing out that if the majority of people with higher income contribute, everyone can get tax relief. He said that there is no other option but the assistance of the International Monetary Fund to uplift the country’s economy.

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