Sri Lanka is actively considering the implementation of a property tax to boost state revenue, following explicit directives from the International Monetary Fund (IMF).
Sources indicate that the introduction of this wealth tax has become a focal point of recent fiscal discussions in Colombo as the government scrambles to meet its revenue targets.
Although the global lender has recommended the introduction of a property tax on several previous occasions, both the past government and the current government have repeatedly deferred its implementation.
The highly sensitive tax has faced continuous delays due to its potential unpopularity and administrative complexities, with successive regimes pushing back timelines from time to time.
However, the room for political maneuvering appears to have run out.
Reports suggest that the Washington based lender has now firmly emphasised that this property tax must be officially enacted to broaden the state revenue base before the next crucial loan tranche can be released to Sri Lanka.
While the government has not yet taken a final decision regarding the exact framework or thresholds of this tax system, the government is running out of options under the current economic bailout programme.
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