Sri Lanka 🇱🇰 on track for highest-ever tax revenue, beating forecasts by mid-December

Sri Lanka 🇱🇰 on track for highest-ever tax revenue, beating forecasts by mid-December

⭕ Sri Lanka 🇱🇰 is set to record the highest tax revenue in its history, surpassing official expectations by mid-December.

⭕ Vehicle imports were a key driver (870B), but Customs also grew non-vehicle revenue by 8%–10% year-on-year, despite no changes to the tax code.

⭕ Inland Revenue Department exceeded its revenue target, even after a projected Rs. 60 billion loss from the PAYE threshold increase.

⭕ This loss was partly offset by Rs. 60–90 billion in additional revenue from the WHT rate increase from 5% to 10%.

⭕ Removal of tax exemptions on service imports and foreign-source income also supported IRD revenue growth.

⭕ The Excise Department just managed to hit the target and remains the least digitalized among the three main revenue agencies.

⭕ The outcome shows tax revenue can improve with stronger administration and targeted policy changes.

⭕ Long-term stability depends on balancing enforcement with incentives that encourage voluntary compliance, including tax reliefs and recognition systems.

#SriLanka 🇱🇰 #RevenueCollection