Sri Lankan shares closed lower for the sixth straight session on Tuesday, dragged down by financial stocks, as the island nation raised taxes to maximise revenue against the backdrop of the country’s crippling economic crisis.
The CSE All-Share index closed down 1.5% at 8,108.09.
Sri Lanka’s cash-strapped government on Tuesday announced a taxation overhaul to boost revenue, hiking value added taxes and corporate income tax, and slashing the relief given to individual taxpayers.
The country also wants farmers to plant more rice as part of plans to avert a severe food shortage, a top official said on Tuesday, as experts warned of a 50% drop in production that would worsen the impact of its already-severe financial crisis.
Last week, the International Monetary Fund said it was in talks with Sri Lanka’s authorities on a package that would restore economic stability and debt sustainability.
Sri Lanka, an island nation of 22 million people, is reeling under its worst economic crisis since independence in 1948, with a severe shortage of foreign exchange curtailing imports, including essentials such as fuel and medicines.
The equity market turnover was 1.62 billion Sri Lankan rupees ($4.56 million).
Trading volume fell to 105.3 million shares from 134.0 million shares in the previous session.
Foreign investors were net buyers in the equity market, purchasing shares worth 153.3 million rupees, while domestic investors were net sellers with 1.54 billion rupees worth of shares sold, according to exchange data.