Central Bank Governor Dr. Indrajit Coomaraswamy said that the government would present the VAT Bill in parliament on August 11 despite the court case pending against the proposed legislation. He said that the delay in presenting the Bill in parliament has hampered the government in reaching its revenue targets.

“This delay being a court case, after August 11 we will be able to catch up revenue targets when the VAT comes into force, Coomaraswamy told a media briefing which was organized by the Central Bank on Friday. The event was held at the Central Bank auditorium, Colombo.

He said when the government’s revenue targets are achieved there will be high credit growth in both the private and public sectors.

The Governor said the government would raise policy rates to ‘lean against’ them in case fiscal slippages occur from a delayed value added tax hike.

A higher than expected credit expansion and strong growth could be expected.

“Sri Lanka would still grow at 5.0 percent or more after policy rates are hiked 50 basis points to 8.5 percent, he said.”A suspension of value added tax legislation by the courts could undermine, both; revenue collection and 2.0 percent gross domestic growth correction this year.”Early indications on growth were also strong, based on tourist earnings, remittances, domestic industry and services, Coomaraswamy said.