> The roots of the crisis lie in tax cuts enacted by President Gotabaya Rajapaksa in late 2019, which came months before the COVID-19 pandemic that battered the country's lucrative tourism industry and led to a drop in foreign workers remittances.

The tax cuts caused annual public revenue losses of about 800 billion rupees, the prime minister's office said in its statement.

The new tax regime and COVID-19's impact, together with the pandemic relief measures, widened the budget deficit significantly to 12.2% of GDP in 2021 from 9.6% of GDP two years earlier.

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