Parliamentary Chaos: Lack of Quorum Halts VAT Debate, Threatening IMF Bailout Release
Parliamentary session abruptly adjourned due to quorum issue during debate on VAT amendment. Opposition members protest lack of information on items subject to VAT. Concerns raised over IMF bailout package.
The parliamentary session was abruptly adjourned by Deputy Speaker Ajith Rajapakshe due to a lack of quorum. The debate on the Value-Added Tax (Amendment) Bill was brought to a halt as the required number of 20 members were not present in the House. The Opposition members walked out in protest, stating that the list of 97 items on which the VAT was to be imposed was not available. The Finance State Minister, Ranjith Siyambalapitiya, opened the debate by emphasizing that the VAT amendment was necessary to boost state revenue.
He mentioned that VAT would be imposed on 97 out of the 138 goods that were previously exempt, and even on fixed telephone networks' Short Message Service (SMS) due to increased usage. However, Siyambalapitiya assured that essential items like medicines, equipment for disabled persons, rice flour, wheat flour, fruits, and vegetables would not be subject to VAT. The adjournment of the parliamentary session has raised concerns as the VAT increase is essential for the release of the International Monetary Fund's (IMF) bailout package of the second tranche worth USD 330 million.
The IMF board is scheduled to meet on December 12 to approve the release of the funds. The VAT increase is expected to contribute to a 1.2 percent increase in state revenue, reaching 12.5 percent of GDP in 2024. The parliamentary session will resume tomorrow, and discussions on the VAT amendment will continue. The Opposition members have expressed their dissatisfaction with the unavailability of the list of items on which VAT will be imposed. The Committee Stage Debate and the division on the Third Reading of the Appropriation Bill (Budget) are also scheduled to take place in the coming days.
The adjournment of the parliamentary session and the ongoing debate on the VAT amendment have drawn attention from both lawmakers and the public, as it plays a crucial role in increasing state revenue and meeting the conditions for the IMF bailout package. The resumption of the session tomorrow will determine the fate of the VAT increase and its impact on the country's financial situation.
