President defends revision of Value Added Tax

President Ranil Wickremesinghe today defended the revision of the Value Added Tax (VAT) which has already resulted in an increase in the price of gas and fuel.

The President said that the Government’s commitment to a comprehensive program aimed at strengthening the country?s economy remains unwavering.

“Contemplating the economic hardships confronting Lebanon, where an economic program encountered a two-year delay, and the extended recovery period of Greece lasting thirteen years due to political instability, I sought an alternative path. Unlike the extreme measures adopted by certain nations, like slashing public service wages by 50%, I was resolute in avoiding such severe actions. Recognizing a decline in our Gross Domestic Product (GDP), we opted for a more calculated and direct strategy. Through the implementation of clear-cut decisions, our aim was to attain a specific level of economic resilience by the end of 2023,” he said.

The President said that to fortify the nation?s economy, timely and essential decisions must be made.

He said the Government’s aim is to attain a 3% economic growth rate this year, with a commitment to advancing even more rapidly.

“Several countries have expressed their support, raising inquiries about our ability to service the incurred debt in the future. To address this concern, it is imperative to diversify and create new sources of income, ensuring the sustainability of our economic recovery. Last year, the Government revenue reached Rs. 3.1 trillion, constituting 12% of our GDP. As part of our strategic vision, we aim to elevate the GDP to 15% by 2026. In the year 2024, we have set a target of achieving Rs. 4.2 trillion in government revenue, necessitating a revision of the Value Added Tax (VAT),” the President said.

The President said that he has carefully considered the challenges associated with the decisions the Government is taking.

“It is not without recognizing the complexities and obstacles that I have pondered these choices extensively. The weight of the responsibility lies in understanding that without taking these decisive measures, we risk facing a recurrence of the last economic crisis,” he said.

President Wickremesinghe expressed these views at the opening ceremony of the new Air Force Headquarters at the Akuregoda, Battaramulla Military Headquarters this morning (Monday). (Colombo Gazette)