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Sri Lanka : Third Review under the Extended Arrangement under the Extended Fund Facility and Request for Modification of Performance Criterion-Press Release; Staff Report; and Statement by the Executive Director for Sri Lanka


International Monetary Fund. Asia and Pacific Dept

Publication Date:

January 12, 2018

Electronic Access:

Free Full Text (PDF file size is 2460 KB).Use the free Adobe Acrobat Reader to view this PDF file


Macro stabilization and two major tax reforms were the key outcomes of the first half of the program. Sri Lanka is pursuing a 3-year reform program with IMF support under the extended arrangement under the Extended Fund Facility (EFF) since June 2016. Performance has been broadly on track regarding fiscal consolidation, revenue mobilization, monetary policy management, and reserves accumulation. The government legislated in 2016 the VAT amendments which increased VAT rates and narrowed exemptions. The program’s landmark reform, the new Inland Revenue Act, was legislated in October 2017 and will be implemented in April 2018. Consistent with the objectives of the EFF-supported program, the authorities announced a new farreaching economic plan titled Vision 2025 in September 2017.