Sri Lanka under Rs 9.5 trillion debt burden: PM Ranil

He said a capital gains tax would be imposed and a uniform VAT would be charged at 15 per%; ending some exemptions

Sri Lankan Prime Minister Ranil Wickremesinghe Tuesday blamed the previous Mahinda Rajapaksa regime for leaving behind a massive Rs 9.5 trillion debt burden on the country.

Wickremesinghe informed the Parliament that the government's debt burden was Rs 9.5 trillion and could further rise.

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He said the government has been compelled to revise the 2016 budget and raise taxes to increase revenue and keep the budget deficit and debt under control.

He said a capital gains tax would be imposed and a uniform value added tax (VAT) would be charged at 15 per%, eliminating the current two-band structure and ending exemptions including to telecoms, private education and health services.

"We will not tax the essential commodities," he added.

Wickremesinghe said the capital gains tax was needed to tax the rich.

"We cant always tax only the poor we need to tax the rich as well," he said.

Meanwhile the analysts said the Colombo stock market suffered a near 2% dip in trading Tuesday due to the news on imposing the capital gains tax.

The market has seen a 12% decline so far in the year.

Wickremesinghe blamed the previous administration for economic blundering resulting in the accrual of high interest debts.

"I predicted that the Rajapaksa regime would not be able to manage the economy by 2015 and would go for an election. We were given the responsibility to turn the economy around we will do it," he said.

He said as part of revival measures the government would sign the proposed economic pact with India.