By Saman Indrajith

Opposition and SJB leader Sajith Premadasa told Parliament yesterday that Sri Lanka had failed to secure the crucial second tranche of a $3 billion loan from the International Monetary Fund as the country was still being ruled by the same corrupt family regime, which had bankrupted the economy.

Premadasa said that the government was increasing taxes on professionals and jacking up the prices of fuel, water and electricity, saying that it needed to increase state revenue but had done nothing to collect 1.7 billion-rupees in taxes due from two liquor producing companies.

Premadasa said that the talks on progress review to be entitled for the second tranche of the IMF loan had failed because the government failed to complete its commitments. “The IMF has said that it did not reach a staff-level agreement with Sri Lanka in its first review. The government could neither achieve the targets set out by the IMF nor uphold democracy and prevent corruption,” Premadasa said, demanding to know when the government would be able to complete the list of obligations it has been given by the IMF.

Premadasa said that the IMF had observed that corruption was rampant.

The IMF had also observed that social welfare mechanisms had come to a halt and the government’s inability to prevent corruption had resulted in collapse of the rule of law, Premadasa said, adding that Sri Lanka would have to strengthen tax administration, remove tax exemptions and actively eliminate tax evasion to increase state revenue.

“Now, the government is increasing taxes on essential commodities and amenities but it has done nothing against tax evasion by two liquor producing companies who alone owe 1.7 billion rupees to government coffers in taxes,” Premadasa said.