By: Staff Writer
June 25, LNW (Colombo):The government embarks on an unprecedented initiative aimed at reshaping the country’s long-term strategy to increase state revenue sustaining economic recovery
Finance Ministry through its Revenue Management Committee (RMC), has requested recommendations before June 12, from experts, institutions, businesses and even individual citizens to strengthen public finances.
This policy initiative aims to crowd-source data-driven and analytical insights to achieve an ambitious long-term government revenue target of 20 percent of GDP (up from current projected levels of roughly 15.4 percent), a senior high official told the Sunday Times Business
Under its ongoing Extended Fund Facility (EFF) with the International Monetary Fund (IMF), Sri Lanka faces aggressive revenue-based consolidation targets.
Crowdsourcing solutions helps find ways to scale revenue without stifling the economic recovery while broadening a narrow tax base, he said.
Sri Lanka’s tax collection relies heavily on consumption-based indirect taxes like Value Added Tax (VAT).
The RMC is explicitly seeking for structural recommendations to capture the extensive informal economy and shift smoothly toward direct taxation.
Previous unilateral adjustments, such as sharp corporate hikes or strict thin capitalisation rules, met severe resistance from groups like the Ceylon Chamber of Commerce.
Further co-authoring fiscal frameworks with society preempts industrial friction and builds civic trust, he explained.
Inviting think-tanks, professional bodies (such as the Institute of Chartered Accountants of Sri Lanka), and academic researchers allows the government to utilise high-level economic modeling without overwhelming state resource limits, RMC report revealed.
The government is prioritising structural digitalisation. Public contributions are likely to yield actionable strategies on implementing modern tools like RAMIS, mandatory e-filing, e-invoicing, and risk-based audit selection frameworks.
Aligning with the National Anti-Corruption Action Plan, open public scrutiny aids in designing mechanisms that eliminate arbitrary bureaucrat discretion within the Inland Revenue Department (IRD), Customs, and Excise units, it added.
This latest public participatory initiative deviates from traditional policymaking processes that are often confined to government officials and international advisers or foreign consultants,
In this context finance ministry seeks contributions from universities, research institutes, think tanks, professional associations, private-sector organizations, non-governmental organizations and qualified individuals with expertise in fiscal matters.
The ministry pursues public input on increasing revenue, formalizing the informal economy, expanding the tax base, and digitalising agencies to improve compliance
Sri Lanka’s fiscal issues require more than tax rate hikes, as evasion, weak compliance, and a large informal economy continue to hinder revenue collection.
The initiative aims to formalise the country’s large informal economy, which currently limits revenue collection and burdens compliant taxpayers. Finance ministry official noted that collecting proposals is only the first step.
The real challenge lies in how politicians are willing to introduce changes in their policies and make other politically sensitive decisions.
The members need to come up with an elaborate report analyzing the implementation process, the financial implications of the proposal, and the risks involved.
On the other hand, institutions need to state their registration particulars, while individuals are free to provide their identity particulars.