ECONOMYNEXT – Sri Lanka revenue agencies have exceeded their target by end June 2025, with higher volumes than normal being collected, Labour Minister and Deputy Minister of Economic Development Anil Jayantha Fernando said.
In general revenue agencies collected about 40 percent of the targeted revenues in the first six months and the balance int the latter half, he said.
“By June 26, in the first six months, we have collected close to 50 percent, that is 47 percent,” Minister Fernando said.
“That is a very good number. That is a good trend. I have to thank all officials involved.
“The government has also introduced technology and processes.”
As the economy grows, value added tax, tends to grow.
This year Sri Lanka opened car imports, which were closed at the central bank printed money for flexible inflation targeting/potential output targeting, losing revenue and promoting further money printing.
Car imports involves excise taxes, registration fees, import duties (which however cause revenue losses when vehicles are assembled locally) and value added taxes.
More economic activity takes place when credit is taken from banks and insurance policies are bought.
Income taxes also grows if companies make more profits, especially if the exchange rate appreciates, costs fall and firms make bigger profits.
However, income taxes destroy capital, thrift and future investment and may slow long term growth. GCC countries that import labour, and East Asian countries that growth fast (some also and import labour) which have monetary stability have low income tax rates. (Colombo/July06/2025)