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SL govt. revenue rises by 40.5% in first eight months of 2024

Published

1 year ago

2024/10/19

Due to increased tax collection and import relaxation

Revenue from taxes on external trade increased by 29.0 percent to Rs. 302.5 billion in the first eight months of 2024 from the same period in 2023, emanating from increase in imports due to the gradual relaxation of import restrictions, Pre-Election Budgetary Position Report 2024 issued by the Ministry of Finance earlier this week said.

The increases in revenue collection from Special Commodity Levies (SCL) by 110.1 percent to Rs. 67.2 billion with the increase in SCL rates on essential commodities such as sugar and potatoes and the increase in revenue receipts from Customs Import Duty (CID) and CESS. Revenue collection from the Ports and Airports Development Levy (PAL) slightly increased by 3.4 percent despite the phasing out of PAL on selected items.

Revenue collected from income taxes increased by 16.3 percent to Rs. 624.7 billion in the first eight months of 2024, achieving 57.8 percent of the annual estimate of Rs. 1,080.0 billion. The increase in revenue from income tax was mainly due to the increase in revenue collection from Advance Personal Income Tax (APIT) and Withholding Tax (WHT) in the first eight months of 2024 from the same period of 2023. Revenue from taxes on goods and services increased by 59.8 percent to Rs. 1,421.3 billion in the first eight months of 2024. This was mainly due to the increase in revenue collected from Value Added Tax (VAT) by 87.2 percent to Rs. 842.5 billion, surpassing the total VAT revenue realized in 2023 by Rs. 148.0 billion stemming from the increase in VAT rates, reduction in the registration threshold, and removal of the vast majority of exemptions. This increase was also driven by increased revenue from the Excise Duty on petroleum products, Excise Duty on liquor, and Social Security Contribution Levy (SSCL).

The revenue from non-tax increased by 31.7 percent to Rs. 209.3 billion in the first eight months of 2024 from Rs. 158.8 billion in the same period of 2023. This has mainly been driven by the increase in revenue from fines, fees and charges, and interest income.

The total government expenditure increased slightly by 5.4 percent to Rs. 3,476.9 billion in the first eight months of 2024. Recurrent expenditure, which accounted for around 87.5 percent of total expenditure in the first eight months of 2024, slightly increased by 3.4 percent to Rs. 3,041.6 billion from Rs. 2,941.7 billion in the same period of 2023. This was mainly driven by the increase of salaries and wages by 6.7 percent to Rs. 659.5 billion in the first eight months of 2024 from Rs. 618.1 billion in the same period of 2023 due to an increase in cost-of-living allowance and the increase of interest payments by 2.2 percent to Rs. 1,559.7 billion in the first eight months of 2024 from Rs. 1,525.7 billion in the same period of 2023 owing to the increase in interest payment on domestic debt, foreign debt and domestic loans. Expenditure on subsidies and transfers increased slightly by 1.5 percent to Rs. 623.8 billion in the first eight months of 2023. Meanwhile, the capital and net lending significantly increased by 22.4 percent to Rs. 435.3 billion in the first eight months of 2024 from Rs. 355.6 billion in the same period of 2023.

Government Revenue including grants increased by 40.5 percent or Rs. 739.3 billion in the first eight months of 2024 from Rs. 1,826.6 billion in the same period of 2023 owing to the increase in tax revenue by 41.4 percent to Rs. 2,348.5 billion in the first eight months of 2024 from Rs. 1,661.2 billion in the same period of 2023. Revenue from taxes on goods and services, which account for 60.5 percent of total tax revenue, increased by 59.8 percent, or Rs. 531.9 billion, to Rs. 1,421.3 billion in the first eight months of 2024 from Rs. 889.5 billion in the same period of 2023. This increase was largely driven by the notable increase in revenue from Value Added Tax (VAT), which increased by 87.2 percent to Rs. 842.5 billion in the first eight months of 2024 from Rs. 450.0 billion in the same period of 2023. Thus, revenue collected from VAT in the first eight months of 2024 outperformed and surpassed Rs. 694.5 billion of revenue collected from VAT for the entire year of 2023. However, positive momentum in revenue generation must be sustained and enhanced over the medium term with a focus on tax compliance, eliminating tax leakages, digitalization, and minimizing corruption vulnerabilities through strengthened tax administration.

Expenditure on salaries and wages for public servants in the first eight months of 2024 including the salaries of employees attached to security forces, police, and Provincial Councils increased by 6.7 percent to Rs. 659.5 billion in 2024 from Rs. 618.1 billion in the same period of 2023. The increase in salaries was mainly attributable to the rise in the cost-of-living allowance by Rs. 5,000 per month effective from January 2024, and the increase of the same allowance by another Rs. 5,000 per month effective from April 2024, as per Public Administration Circular No. 03/2024 and Management Services Circular No. 01/2024. Total pension payments increased by 9.7 percent to Rs. 254.0 billion in the first eight months of 2024 from Rs. 231.6 billion in the same period of 2023.

Interest Payments

Expenditure on interest payments on foreign and domestic debt amounted to Rs. 1,559.7 billion in the first eight months of 2024, which marks an increase of 2.2 percent compared to Rs. 1,525.7 billion recorded in the same period of 2023. Interest payments for foreign debt increased by 34.9 percent to Rs. 100.0 billion in the first eight months of 2024 from Rs. 74.1 billion recorded in the same period of 2023 partly due to the commencing of repayment of some bilateral loans. Moreover, the interest payments on domestic loans slightly increased by 0.6 percent to Rs. 1,459.7 billion in the first eight months of 2024 from Rs. 1,451.6 billion in the same period of 2023.

Welfare and Subsidy Payments

The estimates of Rs. 1,055.7 billion for 2024 have been earmarked for the welfare programmes of social welfare, social security, education, health and nutrition and development assistance which is 15.4 percent of the government’s primary expenditure and 3.5 percent of the GDP. The estimate of Rs. 1,055.7 billion for 2024 represents a 15.3 percent increase compared to the actual expenditure of 2023 amounting to Rs. 915.4 billion. In the first eight months of 2024, the government’s welfare expenditure amounted to Rs. 562.4 billion including Rs. 112.7 billion for the “Aswesuma” programme, Rs. 9.5 billion for school nutrition food programme, Rs. 4.1 billion for the “Poshana Malla” programme, Rs. 4.4 billion for school textbooks and uniforms and Rs. 24.2 billion for fertilizer subsidy. Total welfare expenditure in the first eight months of 2024 increased by 3.3 percent to Rs. 562.4 billion from Rs. 544.3 billion in the same period of 2023. The increase was mainly driven by the increase of 83.9 percent of expenditure on health and nutrition, and the increase in development assistance by growth of 12.4 percent.

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Navy seizes an Indian fishing boat poaching in northern waters

Published

2 hours ago

2025/12/29

Priyan

During an operation conducted in the dark hours of 27 Dec 25, the Sri Lanka Navy seized an Indian fishing boat and apprehended 03 Indian fishermen while they were poaching in Sri Lankan waters, south of the Delft Island in Jaffna.

The seized boat and Indian fishermen (03) were brought to the Kreinagar Jetty and were handed over to the Fisheries Inspector of Jaffna for onward legal proceedings.

News

Delay in govt. response to UK sanctions on ex-military chiefs, and others causes concern

Published

12 hours ago

2025/12/29

Sahan Weerasooriya

General Silva / Admiral Karannagoda

Admiral of the Fleet Wasantha Karannagoda said that he is still waiting for the government’s response to the UK sanctions imposed on three ex-military officers, including him, and a former member of the LTTE.

The former Navy Chief said so in response to The Island query whether he was aware of the position taken by a three-member ministerial committee, consisting of Foreign Minister Vijitha Herath, Justice and National Integration Minister Harshana Nanayakkara and Deputy Defence Minister Maj. Gen (retd) Aruna Jayasekera.

The government named the committee in the wake of the UK declaration of travel bans and asset freezes in respect of Karannagoda, General Shavendra Silva, General Jagath Jayasuriya and Vinayagamoorthy Muralitharan, also known as Karuna. Maj. Gen. Jayasekera said that they inquired into the issue at hand.

Karannnagoda said that he would like to know the government’s recommendations if the ministerial committee briefed the Cabinet as per a decision taken by the Cabinet of Ministers. Karannagoda said that the issue should have been taken at the highest level as various interested parties continue to humiliate the war-winning military by targeting selected individuals.

Other sources, familiar with the issues at hand, told The Island that the government was yet to announce its stand.

Sources pointed out that the Opposition has been silent on what they called a matter of utmost national importance.

Cabinet spokesman Dr. Nalinda Jayathissa is on record as having described the UK move as a unilateral move and that committee was formed to examine the developments and recommend appropriate measures to the Cabinet.

Foreign Minister Herath told The Island the government was not successful in getting the British to withdraw sanctions. Describing the UK decision as unilateral, the Miniser said that the government conveyed its concerns but the UK didn’t change its stand.

The Island raised the issue with Minister Herath and Admiral Karannagoda in the wake of British MP of Sri Lankan origin, Uma Kumaran requesting the UK Foreign Secretary Yvette Cooper to expand on the government’s sanctions imposed on the four above-mentioned persons.

During a Foreign Affairs Committee meeting on 16 December, the MP for Stratford and Bow highlighted the lack of accountability and political will from the current Sri Lankan government to address war crimes and mass atrocities committed in Sri Lanka.

Sources said that David Lammy, who served as Secretary of State for Foreign, Commonwealth and Development Affairs at the time of the declaration of sanctions, had no qualms in declaring that the action taken against four Sri Lankans was in line with a commitment he made during the election campaign to ensure those responsible wouldn’t be allowed impunity. The UK government statement quoted Lammy as having said that this decision ensured that those responsible for past human rights violations and abuses were held accountable.

By Shamindra Ferdinando

News

Sri Lanka outlines seven key vectors of international cooperation at Moscow forum

Published

12 hours ago

2025/12/29

Sahan Weerasooriya

Shobini

Sri Lankan Ambassador to the Russian Federation, Shobini Gunasekera recently presented a conceptual framework of seven key vectors that defined contemporary international relations and facilitated dialogue among States. She made the presentation at XI Moscow International Financial and Economic Forum held under the theme “Building Bridges: Partnership without Borders”.

In her address, the Ambassador emphasised that these vectors represent the channels through which ideas circulate, trade expands, and peace is strengthened, serving as guiding principles for cooperation amid global uncertainties. The seven key vectors highlighted were economic ties as a foundation for long-term stability; political choice and diplomacy through dialogue and multilateral engagement; security cooperation to address cross-border threats; cultural linkages through education, tourism, and professional exchanges; technological advancement, particularly in digital systems and artificial intelligence; environmental stewardship through collective action on renewable energy and climate change; and humanitarian obligations, including disaster relief and development cooperation.

Drawing on Sri Lanka’s experience, the Ambassador illustrated the practical application of these principles by highlighting the country’s strategic location in the Indian Ocean, its role as a trade and logistics hub, and its active engagement in regional groupings such as BIMSTEC and the Indian Ocean Rim Association, where the Russian Federation serves as a Dialogue Partner.

The potential for enhanced Sri Lanka–Russia bilateral cooperation was underscored, particularly through complementarities between Russia’s technological and energy expertise and Sri Lanka’s logistical capabilities and maritime infrastructure. She noted that such synergies could support joint initiatives in trade, innovation, tourism, and logistics, while cultural and scientific exchanges would further strengthen mutual understanding between the two countries.

Concluding her remarks, the Ambassador stated that sustained progress requires dialogue, mutual respect, and forward-looking partnerships capable of shaping a shared and stable future.