Sri Lanka’s finance minister announced his government would be raising taxes as part of a drive to improve its debt rating and reduce the budget deficit.
Stating that the imposition was a necessary measure, Mr Ravi Karunanayake said his government would be raising Value Added Tax and reintroducing capital gains taxes.
"We want to tax the top end of [the consumer], which basically consumes, rather than the downtrodden,” he said.
"Imposing new taxes is a hard-sell, but what more can you do?"
However the taxes are expected to hit Sri Lanka's economically disadvantaged too. The reforms will lead to price rises in "a variety of goods and commodities", according to the Sunday Times.
"[The] price of a kilo of Prima flour went up by Rs. 7.20. This will raise the price of bread, a common diet among Sri Lankans, to a new high," the paper said in its political column.
Mr Karunanayake also slammed recent decisions to downgrade Sri Lanka’s credit rating as "absolutely unfair".
Standard & Poor's ratings agency lowered the outlook on Sri Lanka’s 'B+' long-term sovereign credit rating to negative from stable, citing rising fiscal and external imbalances, earlier this week. The downgrade came after Fitch also took the step to downgrade outlook to B+.
See our earlier post: Another ratings agency downgrades Sri Lanka (11 Mar 2016)
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