Ravi named Asia-Pacific ‘Finance Minister of the Year’

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By 2017-01-11

Recognizing Minister of Finance Ravi Karunanayake's efforts to steer Sri Lanka into a new era of economic reform and a change of mindset, The Banker magazine has awarded Karunanayake with the prestigious Finance Minister of the Year award for Asia-Pacific.

According to The Banker magazine, Karunanayake secured a US$1.5 billion International Monetary Fund (IMF) loan programme that the country needed to avoid a balance of payments crisis, replenish reserves and rebuild confidence among international investors.

According to the magazine the Finance Minister has reached his objective, as in 2015 the government launched a US$ 1.5 billion dual-tranche note sovereign issue, which is the largest since 2007. In 2016, the government also printed a second bond of the same size, with order books of US$ 6.6 billion, despite market volatility after the UK voted to leave the EU. The magazine highlighted that Karunanayake had managed to reduce Sri Lanka's budget deficit from 7 per cent in 2014 to 5.6 per cent in 2016, just below expectations.

"After a visit in September 2016, the IMF said Sri Lanka's tightening of fiscal and monetary policies has been effective and that it met the IMF programme's targets through to the end of June 2016," the magazine noted.
Meanwhile, Sri Lanka's total government revenue grew from Rs 1,195 billion in 2014 to Rs 1,455 billion in 2015, with tax revenue up from Rs 1,050 billion to Rs 1,356 billion.

In 2016, the government passed a bill to increase the Value-Added Tax from 11 per cent to 15 per cent.
The magazine noted that Karunanayake was keen to continue simplifying the tax system as well as change people's mindset towards taxes.

"We were not desperate to go to the IMF. But [to others], securing an IMF loan [is a mark of] financial discipline, so our prime objective was achieved. We wanted to show that it is best to have an abundance of prudence," Karunanayake told the award ceremony.

"We have inculcated in the minds of the people that paying taxes is not something bad, but a must for the country. Every person needs to pay a reasonable charge instead of relying on the government for everything," he said. (MA)

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