Dec 19, 2016 (LBO) – Sri Lanka’s Finance ministry says that state revenue has increased by 23 percent during the first nine months of this year compared with the same period in 2015.
“Accordingly, the state revenue in the first nine months of 2016 rose to 1,180 billion rupees from the 959 billion rupees earned during the same period in 2015,” the ministry said in a statement.
Finance Minister Ravi Karunanayake attributed the rise in income to increased efficiency and eradication of corruption in the process of revenue collectors such as Sri Lanka Customs, the Inland Revenue Department and the Excise Department.
“Large percentage of state revenue is from the income taxes which has increased to 1067 billion rupees from 882 billion rupees on Year on Year basis within the first nine months of this year,” the minister said.
During the last few years due to an increase in heavy public debt the revenue gradually came down to an average of 11 percent of the GDP in 2014.
However, benefiting from the reforms in the tax revenue process the state revenue is expected to increase to 13.5 percent of the GDP by the end of this year.
The Finance Minister Ravi Karunanayake said that the government would be able to cover the recurrent expenditure through the state revenue this year benefiting the people as a result of the reforms introduced by the Good Governance (yahapaalana) government for the development of the country.
Though the previous government made various claims that the country was developed during its regime, the state revenue was not sufficient even to cover the debt servicing for the last five years.
“As a favourable result of the increase in the state revenue up to 13.5 percent of the GDP, the deficit has also come down from 573 billion rupees in the first nine month of the year to 506 billion rupees this year enabling the government to reach its deficit target of 5.4 percent conveniently by the end of the year.”
The government is in the process of implementing a series of focused legislative, administrative, institutional and capacity improvement measures for revenue and expenditure management.
“With the increase in the threshold for PAYE tax none of the persons earning up to Rs 100,000 per month will be subject to taxes from next April,” said Karunanayake.