Sri Lanka domestic tax collections grow 20.6-pct in 2019
ECONOMYNEXT- Sri Lanka’s Inland Revenue Department (IRD) has collected 785.38 billion rupees in taxes in 2019, up 20.6 percent from 2018, only slightly below target officials said, amid a weak economy.
“Last year, our target was 799 billion rupees, and we collected 785 billion rupees, which is a shortfall of 14 billion rupees,” Inland Revenue Commissioner General Nadun Guruge told reporters in Colombo on Friday.
In December, income taxes and indirect taxes were cut, after Gotabhaya Rajapaksa became president, raising questions about value added tax collections in particular for 2020.
No target has been given for the Inland Revenue for 2020.
The 2019 target was almost the same as given for 2018. Sri Lanka has not passed a budget for 2020 and is operating on a vote on account which is effective until end-April.
Some taxes have been cut ahead of parliamentary passages of law.
In 2018, IRD had collected 651.74 billion rupees, against a target of 792.07 billion rupees, while in 2017, against a target of 651.86 billion rupees, the department had collected 602.48 billion rupees.
IRD’s major revenue collections are from income tax and a part of the Value Added Tax (the tax on imports is collected from the Customs Department), along with other smaller levies.
IRD contributes around 40 percent to Sri Lankas total tax revenue, with other major sources being the Excise Department and the Customs.
Guruge told reporters the automation of tax payments is helping to increase collections.
Deputy Commissioner General R. M. Jayasinghe said closing holes in the tax net, especially with regards to tuition teachers and doctors who have their own businesses, is also increasing taxes.
With the new tax cuts, analysts and ratings agencies have warned that Sri Lanka’s budget will face risk of deterioration.
In 2019 Sri Lanka is estimated to have reached a deficit of 7 percent, but it has not put major pressure on the rupee as private credit was weak. (Colombo/Jan17/2020)