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“Government Coffers Filling Fast: Revenue Targets Exceeded in Sri Lanka”
Sri Lanka’s revenue collection bodies have surpassed expectations, exceeding tax revenue targets by 6 percent in the first quarter ending on March 31, according to State Revenue Minister Ranjith Siyambalapitiya.
“After many years of difficult challenges, it has been possible to exceed the expected state revenue in the first quarter of 2024,” Siyambalapitiya stated. The government anticipates a revenue collection of 4,106 billion rupees in 2024.
“The reason for the economic crisis in the past period was the reduction in the level of government revenue. Considering the achievement of higher than the target in the first quarter of this year and the revenue pattern, 2024 will become a year in which the revenue targets can be achieved,” he added.
The three tax revenue collecting bodies – Sri Lankan Customs, Excise Department, and Inland Revenue Department – collected 834 billion Sri Lanka rupees in the first quarter, exceeding the expected revenue target of 787 billion rupees by 6 percent.
The Inland Revenue Department outperformed its target by 13 percent, reaching 430 billion rupees compared to the target of 381 billion rupees in the first quarter of 2024. Additionally, the Customs Department reached its target of 353 billion rupees, while the Excise Department achieved 96% of its revenue requests, earning 51 billion rupees in the first quarter.
To boost revenue, Sri Lanka has implemented various measures, including raising the Value Added Tax (VAT) from 8% to 12%, resulting in an expected increase of government revenues by 65 billion Sri Lankan rupees ($180.56 million).
Moreover, corporate income tax rates were raised, and the personal income tax threshold was lowered, affecting individuals with monthly incomes above 100,000 Sri Lankan rupees, who now have to pay taxes. Additionally, the annual threshold-free income decreased from 3,000,000 rupees to 1,200,000 rupees.
Despite these efforts, economic recovery remains a challenge. The Asian Development Bank forecasts modest growth of 1.9% in 2024, gradually increasing to 2.5% in 2025. Consequently, taxpayers bear the burden as the government endeavours to stabilize its finances and address the crisis.
