Govt in ‘mission impossible’ to increase revenue

The government’s revenue targets for this year has fallen short raising doubts in achieving Budget 2024 revenue estimates, economic experts opined. 

Sri Lanka’s three revenue collection authorities, Inland Revenue, customs and excise departments have collected Rs.2600 billion so far this year, a 20 per cent shortage of the estimated collection of Rs.3130 billion, Finance Ministry data shows.  

According to Budget 2024 estimates, it has been planned to collect Rs.3800 billion from the continuation of existing taxes and some tax revisions, they said adding that this will be an impossible task for the three revenue collection authorities  

The government plans to raise Rs.908 billion by imposing 15 per cent VAT on consumer items and products. But the collection was Rs.680 billion, 25 per cent less than the original estimate, ministry data indicated.

The reason for this reduction of revenue was the drop in sales of consumer items as the people have reducec consumption owing to high cost of living, a former Treasury secretary explained.

People’s purchasing power has declined to a very low level and some of them are compelled to change their eating patterns by restricting to one or two meals per day, he added.

VAT is going to be increased to 18 per cent next year from the current 15 per cent while adding 150 more items including fuel and electricity, informed sources revealed.

However the raising revenue from more taxation on the people would become a gigantic task for the  revenue collection authorities. (Bandula)