IMF calls for regulatory overhaul, tax review to attract foreign investment

The IMF has advised Sri Lankan authorities to streamline the regulatory environment governing business operations as part of efforts to attract greater foreign direct investment to the island nation. The fund's assessment suggests that existing business regulations present unnecessary administrative hurdles that deter potential investors from entering the market.

Alongside regulatory reform, the IMF has recommended a comprehensive review of tax concession schemes currently offered to foreign investors. The fund's position reflects a view that the existing incentive framework may not be optimally designed to attract quality investment or generate sustainable revenue for the government.

The recommendations align with Sri Lanka's broader economic reform agenda under the IMF Extended Fund Facility programme. Policymakers have been encouraged to adopt a more competitive and transparent approach to business regulation, which could enhance the country's standing among international investors while simultaneously strengthening institutional frameworks.

These measures are expected to form part of the structural reforms necessary to support Sri Lanka's economic recovery and facilitate higher, more sustainable growth driven by private investment.