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VAT to reach 20 year high from January

The Cabinet recently sanctioned an increase in the Value Added Tax (VAT) rate, is due to come into effect on January 1, 2024. This amendment will increase the rate from the present 15% to 18%, marking the highest level in two decades....

Will the Increase in Cigarette Taxes Meet Budgeted Revenue?

On the 1st of Jan 2023, the government increased excises taxes on cigarettes by 20% as follows: Size Old Excise Tax per Cigarette New Excise Tax per Cigarette...

Sri Lanka's Government Revenue in 2021 Covered Only 41% of Expenditure

Government revenue in 2021 was only 41% of its expenditure, which was inadequate to cover even its recurrent expenditure. It falls short of the two largest recurrent expenditure components cumulatively - salaries & wages, and interest payments.

Sri Lanka’s Fiscal Performance (2020 vs 2019)

The latest figures released by the Ministry of Finance show that the first quarter budget deficit has increased by 23% in 2020 compared to the first quarter in 2019. Revenue was dragged down by VAT and income taxes. Expenditure was largely stable except for a...

The budget deficit has increased in 2019: With lower revenue and higher expenditure

The recently released figures for 2019 show that government revenue has fallen from 13.4% of GDP in 2018 to 12.6% of GDP in 2019. Meanwhile, government expenditure has increased from 17.7% of GDP in 2018 to 19.4% of GDP in 2019. This has caused a significant increase in...

Consistent revenue shortfalls lead to more borrowings and less spending

The deviation in government revenue from the estimated figure has been increasing overtime. As a result, the government fell short of spending its budgeted expenditure and the budget balance deteriorated. The deviation in the...

Overestimations in Revenue Expectations

Governments have consistently overestimated revenue and these deviations have increased in value since 2014. Overestimations in revenue compel governments to (1) decrease expenditure, and (2) increase borrowings. Watch our