AMCHAM Holds 31st AGM

COLOMBO (News 1st) - The 31st Annual General Meeting (AGM) of the American Chamber of Commerce in Sri Lanka for 2023 convened on the 27th of September, 2023 bringing together key figures and officials to discuss the nation's economic prospects and recent reforms.

Julie Chung, the US Ambassador to Sri Lanka, expressed optimism about Sri Lanka's future. She highlighted the country's strategic location, robust infrastructure, and educated population as factors that could propel Sri Lanka to a leadership position in South Asia. In a significant commitment, USAID is set to provide $35 million in support to Sri Lankan businesses and governance in 2023. Furthermore, the US Development Finance Corporation has already extended substantial financial support, totaling $128 million, to Sri Lankan companies since the onset of the economic crisis, with more funding in the pipeline. Exciting developments are also underway, with the inaugural delegation of the Tifa US Trade representatives office engaging in discussions for a Trade and Investment Framework Agreement Council. This visit is expected to lay the groundwork for an action plan aimed at strengthening trade and investment ties between the two nations.

Meanwhile, Shehan Semasinghe, the Acting Minister of Finance of Sri Lanka, shared insights into Sri Lanka's ongoing journey toward economic recovery. He emphasized the pivotal role that deep economic reforms have played in instilling confidence among both local and global investors. Sri Lanka has struggled with fiscal weaknesses, primarily due to persistent budget deficits stemming from inadequate government revenue generation. To address this, the government implemented substantial tax reforms, resulting in an impressive 50% growth in tax revenue during the first half of 2023. 

He added that this achievement exceeded key IMF targets, marking a substantial improvement from a primary deficit of 5.7% of GDP in 2021. Sri Lanka has established a comprehensive tax policy framework, with future revenue gains expected to be driven by enhanced tax administration and compliance measures. Various reforms are in progress at crucial revenue agencies, including the Inner Revenue Department, Customs, and the Excise Department. The impending upgrade of Remy's will usher in risk-based audits, digitalization of processes, and streamlined interactions between taxpayers and tax authorities. 

The Acting Finance Minister added that the government is also planning to introduce legislation in the form of a Public Finance Management Act in the coming months, reinforcing fiscal rules, transparency, and governance. Public investments will align with fiscal consolidation efforts to further strengthen the nation's economic prospects.

Furthermore, Minister Semasinghe touched upon the ongoing external debt restructuring process, highlighting the substantial progress made in negotiations with the Official Creditor Committee, China, and commercial creditors. He added, " Once the debt restructuring process is completed, it will open up greater avenues for Sri Lanka to access external funding and put Sri Lanka on track to attract further foreign investments as well." 

He said that this positive development comes after an extended period of macroeconomic imbalances, finally addressing long-standing economic vulnerabilities and unlocking Sri Lanka's true investment potential.