Sri Lanka Says Steep Tax Cuts Sparked Crisis, Raises Key Rates

Sri Lanka’s new Prime Minister Ranil Wickremesinghe proposed to raise tax rates to help meet conditions for a bailout from the International Monetary Fund.

The value added tax would rise to 12% from 8%, telecom levy to 15% from 11.25%, and standard corporate tax to 30% from 24%, Wickremesinghe said in a statement Tuesday. The increases will be implemented “over the immediate and near term,” he added.

The government is trying to revert to tax rates that existed before President Gotabaya Rajapaksa slashed them in a failed bid to stimulate the economy, before the pandemic disrupted global travel and sapped ...