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Stressing the urgent need to impose high taxes despite mounting public protests, Sri Lankan President Ranil Wickremesinghe warned that the country would have to revert to an 'era of queues' if revenue is not raised through a direct tax increase.

Making a special statement televised on Wednesday night, President Wickremesinghe said that it was not possible to strengthen the economy without increasing the revenue of the country, which will compel him to reluctantly make tough decisions in order to rebuild the nation.

However political parties, academics, activists and people have warned against the decision to increase taxes, specially at a time when the country going through a severe economic crisis. Opposition parties have warned that people would be called to streets if the tax hike is introduced.

Facing a massive inflation and dollar crunch, Sri Lanka awaits an International Monetary Fund (IMF) bailout of $3.8 billion within a period of four years as a measure to come out of the economic calamity. One of the main IMF conditions is to exceed 20 per cent of direct tax revenue and the government is to tax everyone who earns more than Rs 100,000 (around $275) a month.

"The agreed goal is to achieve 14.5 per cent- 15 per cent of Gross Domestic Product (GDP) revenue by 2026," Wickremesinghe said.

"If Sri Lanka withdraws from this programme, IMF assistance will not be received. Without IMF certification, the support of these international financial institutions such as the World Bank, Asian Development Bank, and the countries that have been supported financially will not be forthcoming. If that happens, the country will be back to the era of queues," President stated.

He said that tougher times ahead will have to be faced. "Therefore, these loans need to be obtained and embark on a debt-restructuring programme. These decisions are not being taken wilfully, but are being done reluctantly. However, these decisions will be reconsidered periodically," the President told the people.

During his address, President Wickremesinghe also said that as an important step in Sri Lanka's debt restructuring programme, a meeting had been convened last week by the IMF with the aim of bringing the three main countries Japan, China and India, which have granted loans to Sri Lanka, on a common platform to discuss the future steps in the formulation of concessions.

"India and China have informed that they will examine the issues further and respond accordingly. These two countries have also informed the possible need for bilateral discussions in this regard," President Wickremesinghe said in a televised public statement.

Wickremesinghe blamed the last government run by Gotabaya Rajapaksa charging that the country lost Rs 700 billion (nearly $1.9 billion) due to wrong economic policies and the inflation rate increased to 70 per cent since Rs 2,300 billion ($6.2 billion) was printed during the past two and a half years.