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ගවේෂණය කරන්න
විදසුන්
Sri Lanka’s Revenue: What Changed Between 2021 and 2024?
Between 2021 and 2024, Sri Lanka’s government revenue and grants rose from 8.3% to 13.7% of GDP— a 65% increase in just three years. This marks a significant turnaround from the historic low of 2021, when tax cuts substantially reduced the revenue base. The latest data, from the Central Bank of Sri Lanka’s Annual Economic Review 2024, show that government revenues have not only recovered but also exceeded pre-crisis levels. The sharp rebound was driven by a series of targeted tax reforms. A breakdown of revenue sources reveals that while most major tax categories grew, Value Added Tax (VAT) alone accounted for nearly half the total increase. The Fall: What Went Wrong in 2020/2021? In 2021, Sri Lanka’s government revenue fell to a historic low of 8.3% of GDP—the lowest level since 1950. This collapse was triggered by a series of tax cuts introduced in early 2020, delivered without offsetting reforms or a clear fiscal strategy. Key policy changes in 2020 included raising the personal income tax threshold from LKR 1.2 million to LKR 3 million while reducing tax rates, and cutting corporate income tax rate from 28% to 24%, with additional concessions for sectors like construction and manufacturing. The VAT rate was reduced from 15% to 8%, and the registration threshold was increased from LKR 12 million to LKR 300 million, narrowing the tax base. The mandatory income tax deduction through the PAYE system was abolished and replaced with a voluntary Advance Personal Income Tax (APIT) scheme. Several other taxes, including the Nation Building Tax (NBT), Economic Service Charge (ESC), and Withholding tax (WHT) on domestic interest, were also removed. These policy changes had an immediate impact: the tax base contracted significantly. According to a previous analysis by PublicFinance.lk, the number of income taxpayers fell by 82%, and the number of VAT-registered businesses dropped by 72% in 2020 compared to the previous year. Government Revenue and Grants plummeted from 11.9% of GDP in 2019 to 8.3% in 2021, widening the budget deficit and increasing debt levels – which culminated in the worst economic crisis faced by Sri Lanka. The Rise: What Drove the Recovery by 2024? By 2024, Sri Lanka’s Government Revenue and Grants had climbed to 13.7% of GDP—its highest level in 15 years, though still below the pre-1996 benchmark of over 20%. This marks a significant turnaround from the 2021 low of 8.3%. In just three years, revenue rose by 1.6 times as a share of GDP and by 2.8 times in nominal terms (from LKR 1,464 billion to LKR 4,091 billion). The primary driver of this recovery was VAT, which increased from 1.7% of GDP in 2021 to 2.6% of GDP in 2024. While VAT alone grew by 2.6% percent of GDP, all other taxes combined only increased by 2.7% of GDP. Non-corporate income taxes—mainly consisting of personal income taxes recorded the second-largest increase—rising by 0.7 percentage points of GDP. Other major taxes, such as corporate income tax, tax on interest, and excise duties contributed to modest gains, each under 0.5 percentage points. Notably, taxes on international trade—including import duties, the Port and Airport Levy (PAL), and the Special Commodity Levy (SCL) declined compared to 2021. The rise in revenue was driven by targeted tax reforms aimed at restoring fiscal stability. The VAT rate was increased from 8% to 18%, while the registration threshold was lowered from LKR 300 million to LKR 60 million, and a number of exemptions were removed to widen the tax base. Personal income tax was strengthened by reducing the tax-free threshold to LKR 1.2 million, compressing slabs, and raising the top rate to 36%, alongside reintroducing mandatory PAYE. The government also raised excise duties on petroleum, cigarettes, and liquor, further boosting collections. WHT was also reinstated to cover the domestic interest component.
විදසුන්
Sri Lanka’s Revenue: What Changed Between 2021 and 2024?
Between 2021 and 2024, Sri Lanka’s government revenue and grants rose from 8.3% to 13.7% of GDP— a 65% increase in just three years. This marks a significant turnaround from the historic low of 2021, when tax cuts substantially reduced the revenue base. The latest data, from the Central Bank of Sri Lanka’s Annual Economic Review 2024, show that government revenues have not only recovered but also exceeded pre-crisis levels. The sharp rebound was driven by a series of targeted tax reforms. A breakdown of revenue sources reveals that while most major tax categories grew, Value Added Tax (VAT) alone accounted for nearly half the total increase. The Fall: What Went Wrong in 2020/2021? In 2021, Sri Lanka’s government revenue fell to a historic low of 8.3% of GDP—the lowest level since 1950. This collapse was triggered by a series of tax cuts introduced in early 2020, delivered without offsetting reforms or a clear fiscal strategy. Key policy changes in 2020 included raising the personal income tax threshold from LKR 1.2 million to LKR 3 million while reducing tax rates, and cutting corporate income tax rate from 28% to 24%, with additional concessions for sectors like construction and manufacturing. The VAT rate was reduced from 15% to 8%, and the registration threshold was increased from LKR 12 million to LKR 300 million, narrowing the tax base. The mandatory income tax deduction through the PAYE system was abolished and replaced with a voluntary Advance Personal Income Tax (APIT) scheme. Several other taxes, including the Nation Building Tax (NBT), Economic Service Charge (ESC), and Withholding tax (WHT) on domestic interest, were also removed. These policy changes had an immediate impact: the tax base contracted significantly. According to a previous analysis by PublicFinance.lk, the number of income taxpayers fell by 82%, and the number of VAT-registered businesses dropped by 72% in 2020 compared to the previous year. Government Revenue and Grants plummeted from 11.9% of GDP in 2019 to 8.3% in 2021, widening the budget deficit and increasing debt levels – which culminated in the worst economic crisis faced by Sri Lanka. The Rise: What Drove the Recovery by 2024? By 2024, Sri Lanka’s Government Revenue and Grants had climbed to 13.7% of GDP—its highest level in 15 years, though still below the pre-1996 benchmark of over 20%. This marks a significant turnaround from the 2021 low of 8.3%. In just three years, revenue rose by 1.6 times as a share of GDP and by 2.8 times in nominal terms (from LKR 1,464 billion to LKR 4,091 billion). The primary driver of this recovery was VAT, which increased from 1.7% of GDP in 2021 to 2.6% of GDP in 2024. While VAT alone grew by 2.6% percent of GDP, all other taxes combined only increased by 2.7% of GDP. Non-corporate income taxes—mainly consisting of personal income taxes recorded the second-largest increase—rising by 0.7 percentage points of GDP. Other major taxes, such as corporate income tax, tax on interest, and excise duties contributed to modest gains, each under 0.5 percentage points. Notably, taxes on international trade—including import duties, the Port and Airport Levy (PAL), and the Special Commodity Levy (SCL) declined compared to 2021. The rise in revenue was driven by targeted tax reforms aimed at restoring fiscal stability. The VAT rate was increased from 8% to 18%, while the registration threshold was lowered from LKR 300 million to LKR 60 million, and a number of exemptions were removed to widen the tax base. Personal income tax was strengthened by reducing the tax-free threshold to LKR 1.2 million, compressing slabs, and raising the top rate to 36%, alongside reintroducing mandatory PAYE. The government also raised excise duties on petroleum, cigarettes, and liquor, further boosting collections. WHT was also reinstated to cover the domestic interest component.
විදසුන්
Sri Lanka’s Revenue: What Changed Between 2021 and 2024?
Between 2021 and 2024, Sri Lanka’s government revenue and grants rose from 8.3% to 13.7% of GDP— a 65% increase in just three years. This marks a significant turnaround from the historic low of 2021, when tax cuts substantially reduced the revenue base. The latest data, from the Central Bank of Sri Lanka’s Annual Economic Review 2024, show that government revenues have not only recovered but also exceeded pre-crisis levels. The sharp rebound was driven by a series of targeted tax reforms. A breakdown of revenue sources reveals that while most major tax categories grew, Value Added Tax (VAT) alone accounted for nearly half the total increase. The Fall: What Went Wrong in 2020/2021? In 2021, Sri Lanka’s government revenue fell to a historic low of 8.3% of GDP—the lowest level since 1950. This collapse was triggered by a series of tax cuts introduced in early 2020, delivered without offsetting reforms or a clear fiscal strategy. Key policy changes in 2020 included raising the personal income tax threshold from LKR 1.2 million to LKR 3 million while reducing tax rates, and cutting corporate income tax rate from 28% to 24%, with additional concessions for sectors like construction and manufacturing. The VAT rate was reduced from 15% to 8%, and the registration threshold was increased from LKR 12 million to LKR 300 million, narrowing the tax base. The mandatory income tax deduction through the PAYE system was abolished and replaced with a voluntary Advance Personal Income Tax (APIT) scheme. Several other taxes, including the Nation Building Tax (NBT), Economic Service Charge (ESC), and Withholding tax (WHT) on domestic interest, were also removed. These policy changes had an immediate impact: the tax base contracted significantly. According to a previous analysis by PublicFinance.lk, the number of income taxpayers fell by 82%, and the number of VAT-registered businesses dropped by 72% in 2020 compared to the previous year. Government Revenue and Grants plummeted from 11.9% of GDP in 2019 to 8.3% in 2021, widening the budget deficit and increasing debt levels – which culminated in the worst economic crisis faced by Sri Lanka. The Rise: What Drove the Recovery by 2024? By 2024, Sri Lanka’s Government Revenue and Grants had climbed to 13.7% of GDP—its highest level in 15 years, though still below the pre-1996 benchmark of over 20%. This marks a significant turnaround from the 2021 low of 8.3%. In just three years, revenue rose by 1.6 times as a share of GDP and by 2.8 times in nominal terms (from LKR 1,464 billion to LKR 4,091 billion). The primary driver of this recovery was VAT, which increased from 1.7% of GDP in 2021 to 2.6% of GDP in 2024. While VAT alone grew by 2.6% percent of GDP, all other taxes combined only increased by 2.7% of GDP. Non-corporate income taxes—mainly consisting of personal income taxes recorded the second-largest increase—rising by 0.7 percentage points of GDP. Other major taxes, such as corporate income tax, tax on interest, and excise duties contributed to modest gains, each under 0.5 percentage points. Notably, taxes on international trade—including import duties, the Port and Airport Levy (PAL), and the Special Commodity Levy (SCL) declined compared to 2021. The rise in revenue was driven by targeted tax reforms aimed at restoring fiscal stability. The VAT rate was increased from 8% to 18%, while the registration threshold was lowered from LKR 300 million to LKR 60 million, and a number of exemptions were removed to widen the tax base. Personal income tax was strengthened by reducing the tax-free threshold to LKR 1.2 million, compressing slabs, and raising the top rate to 36%, alongside reintroducing mandatory PAYE. The government also raised excise duties on petroleum, cigarettes, and liquor, further boosting collections. WHT was also reinstated to cover the domestic interest component.
විදසුන්
Sri Lanka’s Revenue: What Changed Between 2021 and 2024?
Between 2021 and 2024, Sri Lanka’s government revenue and grants rose from 8.3% to 13.7% of GDP— a 65% increase in just three years. This marks a significant turnaround from the historic low of 2021, when tax cuts substantially reduced the revenue base. The latest data, from the Central Bank of Sri Lanka’s Annual Economic Review 2024, show that government revenues have not only recovered but also exceeded pre-crisis levels. The sharp rebound was driven by a series of targeted tax reforms. A breakdown of revenue sources reveals that while most major tax categories grew, Value Added Tax (VAT) alone accounted for nearly half the total increase. The Fall: What Went Wrong in 2020/2021? In 2021, Sri Lanka’s government revenue fell to a historic low of 8.3% of GDP—the lowest level since 1950. This collapse was triggered by a series of tax cuts introduced in early 2020, delivered without offsetting reforms or a clear fiscal strategy. Key policy changes in 2020 included raising the personal income tax threshold from LKR 1.2 million to LKR 3 million while reducing tax rates, and cutting corporate income tax rate from 28% to 24%, with additional concessions for sectors like construction and manufacturing. The VAT rate was reduced from 15% to 8%, and the registration threshold was increased from LKR 12 million to LKR 300 million, narrowing the tax base. The mandatory income tax deduction through the PAYE system was abolished and replaced with a voluntary Advance Personal Income Tax (APIT) scheme. Several other taxes, including the Nation Building Tax (NBT), Economic Service Charge (ESC), and Withholding tax (WHT) on domestic interest, were also removed. These policy changes had an immediate impact: the tax base contracted significantly. According to a previous analysis by PublicFinance.lk, the number of income taxpayers fell by 82%, and the number of VAT-registered businesses dropped by 72% in 2020 compared to the previous year. Government Revenue and Grants plummeted from 11.9% of GDP in 2019 to 8.3% in 2021, widening the budget deficit and increasing debt levels – which culminated in the worst economic crisis faced by Sri Lanka. The Rise: What Drove the Recovery by 2024? By 2024, Sri Lanka’s Government Revenue and Grants had climbed to 13.7% of GDP—its highest level in 15 years, though still below the pre-1996 benchmark of over 20%. This marks a significant turnaround from the 2021 low of 8.3%. In just three years, revenue rose by 1.6 times as a share of GDP and by 2.8 times in nominal terms (from LKR 1,464 billion to LKR 4,091 billion). The primary driver of this recovery was VAT, which increased from 1.7% of GDP in 2021 to 2.6% of GDP in 2024. While VAT alone grew by 2.6% percent of GDP, all other taxes combined only increased by 2.7% of GDP. Non-corporate income taxes—mainly consisting of personal income taxes recorded the second-largest increase—rising by 0.7 percentage points of GDP. Other major taxes, such as corporate income tax, tax on interest, and excise duties contributed to modest gains, each under 0.5 percentage points. Notably, taxes on international trade—including import duties, the Port and Airport Levy (PAL), and the Special Commodity Levy (SCL) declined compared to 2021. The rise in revenue was driven by targeted tax reforms aimed at restoring fiscal stability. The VAT rate was increased from 8% to 18%, while the registration threshold was lowered from LKR 300 million to LKR 60 million, and a number of exemptions were removed to widen the tax base. Personal income tax was strengthened by reducing the tax-free threshold to LKR 1.2 million, compressing slabs, and raising the top rate to 36%, alongside reintroducing mandatory PAYE. The government also raised excise duties on petroleum, cigarettes, and liquor, further boosting collections. WHT was also reinstated to cover the domestic interest component.
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2020 සිට 2021 වන විට රජයේ අයවැය හිඟය රුපියල් බිලියන 32 කින් අඩු වී ඇත
2021 වසර සඳහා මෑතකදී...
2022-09-20
විශ්ලේෂණය බලන්න
2021 අයවැය පිළිබඳ ප්රසිද්ධ වාර්තාව: වියදම් සඳහා වෙන් කෙරෙන ප්රතිපාදන හා බදුකරණ ප්රතිපත්ති රජයේ ප්රතිපත්තියට අනුකූලද යන්න පිළිබඳ ඇගැයීම
මෙම වාර්තාව, ශ්රී ලංකාවේ මධ්යම රජයේ 2021 වර්ෂය සඳහා වූ අයවැය පිළිබඳව පළ කරන ලද වාර්තා දෙකකින් දෙවන වාර්තාව වේ. මෙමඟින් රජයේ වියදම් සඳහා වෙන් කෙරෙන ප්රතිපාදන හා බදුකරණ ප්රතිපත්ති කෙතෙරම් දුරට රජයේ ප්රතිපත්තිවලට අනුකූල වන්නේද යන්න ඇගැයීමට ලක් කෙරේ. එසේ ඇගැයී...
2021-05-17
විශ්ලේෂණය බලන්න
අයවැය 2021 සමාලෝචනය - 2 කොටස: අයවැය ඉලක්කම් ගැන දන්නේ කව්ද?
Executive Director Nishan de Mel and Research Director Deshal de Mel discuss the numbers behind Sri Lanka’s 2021 Budget.
2021-03-17
විශ්ලේෂණය බලන්න
2021 අයවැයෙහි ඇතුළත් අධි-සුබවාදී ඇස්තමේන්තු
ශ්රී ලංකාවේ 2021 වර්ෂය සඳහා වූ අයවැයෙහි රජයේ ආදායම සම්බන්ධයෙන් විශාල අධිඇස්තමේන්තු ඇතුළත්ව තිබිණි. විවි...
2021-01-08
විශ්ලේෂණය බලන්න
අයවැය කතාවලට ඇතුළත් කර නොමැති ඇස්තමේන්තු
2021 වසර සඳහා වන අයවැය කතාවෙහි සඳහන් ඇතැම් යෝජනා සඳහා වූ ඇස්තමේන්තු ගණනාවක්ම ඊට ඇතුළත් කර නොතිබිණි. ඇත්ත වශයෙන්ම, 2019 අයවැයේ ආදායම් යෝජනා 11 ක් සහ වියදම් යෝජනා 3 ක් ස...
2020-12-16
විශ්ලේෂණය බලන්න
2000 සිට 2021 දක්වා රජයේ ආදායම මූලාශ්ර අනුව බෙදා දැක්වීම
2000 සිට 2021 දක්වා එක් එක් වසරවල රජයේ ආදායම ඒවායේ මූලාශ්ර අනුව බෙදා දැක්වීමක් පහත වේ. එක් එක් වර්ෂයට අදාළව එම මූලාශ්රවලින් ලැබී තිබෙන දායකත්වය දැනගැනීමට කර්සරය අදාළ වර්ෂය මතට ගෙන යන්න.
2020-11-20
විශ්ලේෂණය බලන්න
Budget 2021 Round-up With Expert Commentary
The Public Finance Platform presents an expert commentary on the 2021 budget speech, featuring panelists from various fields. Hosted by Deshal de Mel (Verité Research) and Dhananath Fernando (Advocata Institute), this discussion focuses on the promise...
2020-11-17
විශ්ලේෂණය බලන්න
Total Government Revenue 2021
The chart below shows the breakdown of the budgeted government revenue for 2021. Click on the respective categories/subcategories for more details.
2020-11-17
විශ්ලේෂණය බලන්න
Summary of 2021 Budget
Here’s a summary of government expenditure, revenue and financing allocated in the 2021 Budget. Government expenditure for 2021 amounts to LKR. 3,594 Bn and government revenue and grants for 2021 amounts to LKR. 2,029. Note: Figures in the Budget Speech may not always be similar t...
2020-11-17
විශ්ලේෂණය බලන්න
