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2023 Budget's revenue target missed by LKR 382 Bn

The Ministry of Finance Annual Report, released on 31st May 2024, shows that in 2023, total revenue including grants fell short of the Budget target by LKR 382 billion or 11%. In 2023, actual total revenue and grants amounted to LKR 3,074 billion, while the approved estimates set at the end of 2022 for 2023 were LKR 3,456 billion. Among the revenue components, VAT contributed the most to the shortfall, accounting for over half of the gap, missing its estimate by LKR 214 billion or 24%. Excise duty also significantly underperformed, falling short by LKR 88 billion.

Conversely, some revenue components exceeded their approved estimates. Revenue from Withholding Taxes and Pay-As-You-Earn (PAYE) taxes made surpluses of LKR 68 billion and LKR 45 billion, respectively, or 76% and 45% above the target. This increase could be due to the reintroduction of Withholding Taxes and PAYE at the beginning of 2023.

Exhibit 1: Government Revenue actuals compared against budgeted for 2023

Revenue

2023 Revised Estimate

2023 Actual
Revenue

Deviation (LKR Bn)

Deviation

Total Revenue and Grants

3,456

3,074

(382)

-11%

VAT

908

694

(214)

-24%

Excise Tax

557

469

(88)

-16%

Taxes on international trade

458

392

(65)

-14%

Corporate Income Tax

597

555

(42)

-7%

Withholding Tax

90

158

68

76%

Pay-As-You-Earn

100

145

45

45%


 

Source

Ministry of Finance' FINAL BUDGET  POSITION REPORT (ANNUAL REPORT) 2023' at https://www.treasury.gov.lk/api/file/ad12f7fa-d2db-43d4-9daa-9270ee7b7cac [last accessed 7 August 2024].

Ministry of Finance 'Budget Estimates 2023' at https://www.treasury.gov.lk/api/file/e286b9e4-59b1-406f-b324-12f2b46969f2 [last accessed 7 August 2024].

2024-08-09
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