මාතෘකා
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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රාජ්ය මූල්ය දත්ත හා විශ්ලේෂණයන් සඳහා
නිදහස් හා විවෘත ප්රවේශය
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මාතෘකා
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Insights and analysis on the 2023 IMF programme.
ශ්රී ලංකාව සිය මණ්ඩල මට්ටමේ ගිවිසුම සුරක්ෂිත කර ගැනීමට කොපමණ කාලයක් ගත කළාද?
ශ්රී ලංකාවේ ණය ප්රතිව්යුහගත කිරීමේ ක්රියාවලිය බොහෝ දෙනාගේ අවධානයට ලක්වන මාතෘකාවක් වී ඇති අතර ජාත්යන්තර මූල්ය අරමුදල (IMF) සමඟ ගිවිසුමකට එළඹීම ප්රමාද වීම ආයෝජකයින් සහ ප්රතිපත්ති සම්පාදකයින් අතර කනස්සල්ලට හේතු වේ. 2009 වසරේ සිට ණය ප්...
පීඑෆ් වයර් පුවත්
මූලාශ්රය:
The Morning
Collective effort key to success of debt restructu...
IMF Chief Kristalina Georgieva stresses international support, debt restructuring, and reform commitments as vital for Sri Lanka's economic recovery and growth.
වැඩිදුර කියවන්න
මූලාශ්රය:
Economy Next
IMF says “strong expectation” on Sri Lanka deal wi...
Sri Lanka is making strides towards financial stabilization as it moves towards agreements with commercial creditors, including discussions with the International Monetary Fund (IMF). The IMF Communications Director, Julie Kozack, expressed...
වැඩිදුර කියවන්න
මූලාශ්රය:
LBO
Monetary Policy Board further reduces policy inter...
The Monetary Policy Board of the Central Bank of Sri Lanka, in its meeting on November 23, 2023, decided to decrease the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) by 100 basis points each to 9.00% an...
වැඩිදුර කියවන්න
විදසුන් කියවන්න: International Monetary Fund
Sri Lanka’s IMF scorecard: meeting or mi...
IMF වැඩසටහනේ ප්රගතිය - 2025 මැයි
ශ්රී ලංකාවේ දැනට ක්රියාත්මක අන්තර්ජාතික මුල්ය අරමුදලේ...
ශ්රී ලංකාව IMF වැඩසටහන සාර්ථක කර ගැනීමට...
මෙරට ක්රියාත්මක අන්තර්ජාතික මූල්ය අරමුදලේ ණය මුදල් වැඩසටහන ය...
අප්රේල් අවසන් වන විට IMF කැපවිම්වලින් 3...
2024 අප්රේල් මාසය අවසන් වන විට, ශ්රී ලංකාව එහි නියමිත කැපවීම...
පෙබරවාරි අවසන් වන විට IMF කැපවීම්වලින් 3...
2024 පෙබරවාරි අවසානය වන විට, ජාත්යන්...
ඉටු කළ යුතු මුළු කැපවීම් ගණන 110කි එයින්...
ජාත්ය
Sri Lanka met 46 IMF commitments and fai...
The transparency in Sri Lanka’s ong...
Sri Lanka met 41 IMF commitments and fai...
Sri Lanka verifiably met 41 of the 73 trackable commitments that were due for completion by end-O...
සැප්තැම්බර් මාසය වන විට IMF වැඩසටහනේ වින...
ජාත්යන්තර මූල්ය අරමුදල (IMF) සම...
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වීශේෂාංග
ශ්රී ලංකාවේ විදේශ සංචිත ක්ෂය වීමට එකම හේතුව කොවිඩ...
ශ්රී ලංකාවේ භාවිතා කළ හැකි විදේශ සංචිත 2019 දී ඩොලර් මිලියන 7,642 සිට 2021 අවසානය වන විට ඩොලර් මිලියන1,579 දක්වා පහත වැටි ඇත. වසංගතය අතරතුර ශ්රී ලංකාවේ...
වැඩිදුර කියවන්න
මූල්ය නීතී උල්ලංඝනය කිරීම: අයවැය 2024
යෝජිත 2024 අයවැය මගින්, 2003 රාජ්ය මූල්ය කළමනාකරණ (වගකීම්) පනතේ නියම කර ඇති දළ දේශීය නිෂ්පාදිතයෙන් 5% ක හිඟ නීතිය උල්ලංඝනය කරයි.
වැඩිදුර කියවන්න
An Overview of IMF Extended Fund Facility
This article was compiled by Professor Udara Peiris and Raj Prabu Rajakulendran. Udara Peiris joined Oberlin in the fall of 2022. He was previously a tenur...
වැඩිදුර කියවන්න
