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Sri Lanka exceeds tax revenue target by 6 percent in first quarter: State Finance Minister 

April 24, Colombo (LNW): Sri Lanka’s revenue collecting bodies have outperformed and exceeded tax revenue target by 6 percent for the first quarter ended on March 31, State Revenue Minister Ranjith Siyambalapitiya said.

“After many years of difficult challenges, it has been possible to exceed the expected state revenue in the first quarter of 2024,” he said in a statement. The government expects a revenue collection of 4,106 billion rupees in 2024.

He made this disclosure on the ability of the government to achieve 2024 budget revenue targets following  a leading economic research agegency’s prediction on difficulty to meet the estimated revenue in the budget 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 said.

However Sri Lanka’s financial constraints   are to be continued in 2024, with the nation on track to miss its budget revenue target for the 33rd consecutive year with fundraising issues mainly from borrowings and taxation becoming increasingly difficult, according to a new report by Verité Research.

The Verité Research report, titled “State of the Budget Report 2024,” paints a concerning picture for Sri Lanka’s financial health.

While the government’s official 2024 budget sets an ambitious revenue target of Rs 4.164 trillion, Verité Research estimates a significant shortfall of 14%.

This leaves a projected revenue of only Rs. 3.57 trillion – a stark contrast to the government’s optimistic projections.]

The three tax revenue collecting bodies – Sri Lankan Customs, Excise Department, and Inland Revenue Department have collected 834 billion Sri Lanka rupees in the first quarter.

 “It is a 6% higher than the expected revenue target of 787 billion rupees,” Siyambalapitiya said.

He said the Inland Revenue Department exceeded its target by 13 percent to 430 billion rupees compared to the target of 381 billion rupees in the first quarter of 2024.

He also said the Customs Department has managed to reach the target of 353 billion rupees and the Excise Department has also achieved 96% of the revenue requests and earned 51 billion rupees in the first quarter.

The island nation has raised Value Added Tax (VAT), imposed new taxes, and increased personal income taxes to boost the revenue under an International Monetary Fund-backed reforms in return of a $3 billion External Fund Facility.

People have started to grumble over the government’s higher taxes without reducing some of the state expenditures. The government has been in the process to privatize some key state-owned enterprises. However, that process faced delays amid gradually rising protests against the move

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