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Foreign interest payments up by 13.9 percent

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Foreign interest payments, which represent 4.7 percent of Sri Lanka’s total interest payments, have increased by 13.9 percent to Rs. 34.0 billion in the first four months of 2024, compared to the same period of 2023, according to the Mid-year fiscal position report–2024, presented by the Ministry of Finance to Parliament recently. Recurrent expenditure, which accounted for around 90 percent of Sri Lankan government’s total expenditure in the first four months of 2024, declined by 4.4 percent to Rs. 1,419.3 billion from Rs. 1,485.0 billion recorded in the same period of 2023.

 This was primarily led by the decline of 11.3 percent in interest expenditure to Rs. 726.1 billion from Rs. 819.0 billion in the same period of 2023, and is attributable to the decline in domestic interest payments by 12.3 percent to Rs. 692.1 billion due to the decline in domestic interest rates and the effects of the completion of Domestic Debt Optimization (DDO), the report said. However, foreign interest payments, which represent 4.7 percent of total interest payments, have increased by 13.9 percent to Rs. 34.0 billion. Non-interest recurrent expenditure increased by 4.1 percent in the first four months of 2024 compared to the same period of 2023 with the increase of expenditure on goods and services by 12.5 percent to Rs. 99.8 billion from Rs. 88.7 billion and the increase of expenditure on subsidies and transfers by 6.4 percent to Rs. 291.5 billion from Rs. 274.0 billion.

Expenditure on salaries and wages declined by 0.5 percent to Rs. 301.8 billion in the first four months of 2024 from Rs. 303.3 billion in the same period of 2023 owing to the effects of limiting new recruitments to essential positions and effective management of cadres. Capital and Net Lending declined by 0.4 percent to Rs. 159.9 billion in the first four months of 2024 from Rs. 160.6 billion in the same period of 2023. This was marked by a decline in transfers to public institutions, provincial councils, and net lending, despite the increase in expenditure for the acquisition of fixed assets by 20.8 percent.

Meanwhile, total Government revenue excluding grants increased by 48.3 percent to Rs. 1,216.0 billion in the first four months of 2024 compared to Rs. 820.1 billion in the same period of 2023 mainly due to the increase in tax revenue by 50.5 percent to Rs. 1,117.8 billion from Rs. 742.6 billion.

The increase in tax revenue was led by the increase in revenue from: 1) VAT by 89.5 percent or 199.7 billion driven by the increase of the VAT rate to 18 percent from 15 percent with effect from January 1, 2024, reduction in the VAT registration threshold from Rs. 80 million per annum to  Rs. 60 million per annum with effect from January 1, 2024, removal of the vast majority of VAT exemptions with effect from January 1, 2024 and the increase in imports by 9.5 percent in the first four months of 2024 compared to the same period in 2023;2) Income taxes by 27.3 percent or Rs. 52.3 billion due to the realization of the full impact of the tax policy changes that were made effective on January 1, 2023, but were reflected in increases of revenue from February 2023 onwards, impacts of increased wages both in the public sector and informal private sector (Year-on year increase of the public sector and informal private sector nominal wages rate indices were 10.6 percent and 7.1 percent, respectively in February 2024), positive impact of the increased economic activity and return to economic growth on the corporate and personal income taxes;3) Excise Duty on Petroleum by 165.7 percent or Rs. 46.0 billion driven by the increase in petroleum imports by 14.4 percent in the first four months of 2024 compared to the same period in 2023 and the net increase in Excise Duty rates with the increase of rates for petrol and diesel by Rs. 25 per litre on June 1, 2023 and the decrease of rates for Diesel by Rs. 6 per litre and for Petrol by Rs. 5 per litre on January 1, 2024;4) SCL by 107.4 percent or Rs. 16.0 billion driven by the rate increases for sugar and potato to Rs. 50 per kg and the increase in the volume of imports in major commodity items;5) CID by 68.5 percent or Rs. 13.9 billion due to the increase in CID rates from 0:10:15 percent to 0:15:20 percent effective from March 28, 2023, and the increase in imports;6)  SSCL by 19.3 percent or Rs. 13.5 billion due to the increase in the number of taxpayers with the lowering of the registration threshold from Rs. 120 million per annum to Rs. 60 million per annum with effect from January 1, 2024 and the impact of the increase in imports;7) Excise Duty on liquor by 20.6 percent or Rs. 12.0 billion due to the realization of the full impact of excise duty rate revisions on liquor implemented with effect from July 1, 2023, the indexation of Excise Duty to inflation and increase of excise duty rates by 14 percent on January 1, 2024, and the revision of annual excise license fees with effect from January 12, 2024; and8) CESS by 64.3 percent or Rs. 10.7 billion due to the increase in imports.

The increase of non-tax revenue by 26.8 percent or Rs. 20.8 billion in the first four months of 2024 also contributed to the increase in revenue. This was led by the increase in revenue from interest by Rs. 11.5 billion, fines, fees, and charges by 8.6 billion and profits and dividends by 3.7 billion. (SI)



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58,454 International aircraft movements in Sri Lanka in first 11months of 2025 – Ministry of Ports and Civil Aviation

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According to figures released by the Ministry of Ports and Civil Aviation there have been 58,454 international aircraft movements in the first 11 months of 2025 in Sri Lanka. [An  aircraft movement refers to the count of take offs and landings at an airport]

The figures also confirm that tourist arrivals via air stands at 2.1 million.

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Highest revenue in 93-year history of Inland Revenue Department collected in 2025

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The Inland Revenue Department has succeeded in collecting Rs. 2,203 billion in revenue in 2025, the highest amount recorded in its 93-year history. This represents a surplus of Rs. 33 billion over the revenue target for the year and a 15 per cent increase compared with the revenue collected in the previous year, stated Commissioner-General of Inland Revenue Ms Rukdevi Fernando.

She made these remarks at a discussion held on Tuesday (30)  morning at the Department’s auditorium under the patronage of President Anura Kumara Dissanayake.

Marking the first occasion in the 93-year history of the Inland Revenue Department that a President has visited the Department, the President attended a meeting with the staff  to review the progress achieved in 2025 and the new plans for 2026.

The President expressed his appreciation to all officers and staff of the Inland Revenue Department for surpassing the revenue expected by the Government and urged everyone to continue working towards a common objective in order to realise the economic transformation required for the country.

Emphasising that no individual is entitled to the privilege of evading taxes, the President stated that the era in which a tax culture prevailed based on personal or political affiliations has come to an end. He further stressed that the law will be enforced without hesitation, irrespective of status, against those who attempt to evade taxes.

The President also pointed out that tax collection is neither repression nor coercion but a legitimate right of the State, adding that necessary changes will be made to laws, regulations, designations and staffing in order to secure this contribution.

He further emphasised that the Government’s objective is to ensure that the benefits of these economic achievements flow to the people of the country. The Government is focusing on improving essential public services to enhance the quality of life, undertaking a new transformation of the transport system and providing adequate allocations for the development of the education and health sectors.

The President also highlighted the need for a targeted programme to properly collect the taxes due to the Government by addressing issues such as improving tax literacy, simplifying the tax system and filling staff shortages.

Ms Rukdevi Fernando stated that the professional competence and dedication of the Department’s officers were the key factors behind this success.

She further noted that a revenue target of Rs. 2,401 billion has been set for 2026 and that the Department expects to achieve this through programmes aimed at enhancing tax compliance and broadening the tax base.

In addition, she said that the Department plans to expand third-party data sharing, strengthen investigations into domestic and overseas assets, take over the RAMIS system, reinforce risk-based auditing, introduce e-invoicing, adopt modern technology for tax administration and enhance tax ethics in 2026.

Minister of Labour and Deputy Minister of Finance and Planning Dr Anil Jayantha Fernando, Deputy Minister of Economic Development Nishantha Jayaweera, Secretary to the President Dr Nandika Sanath Kumanayake, Commissioner-General of Inland Revenue Ms Rukdevi Fernando and senior officials and staff of the Department were present at the occasion.

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Sri Lanka Customs exceeds revenue targets to enters 2026 with a surplus of Rs. 300 billion – Director General

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The year 2025 has been recorded as the highest revenue-earning year in the history of Sri Lanka Customs, stated Director General of Sri Lanka Customs, Mr. S.P. Arukgoda, noting that the Department had surpassed its expected revenue target of Rs. 2,115 billion, enabling it to enter 2026 with an additional surplus of approximately Rs. 300 billion.

The Director General made these remarks at a discussion held on Tuesday  (30)  morning at the Sri Lanka Customs Auditorium, chaired by President Anura Kumara Dissanayake.

The President visited the Sri Lanka Customs Department this to review the performance achieved in 2025 and to scrutinize the new plans proposed for 2026. During the visit, the President engaged in extensive discussions with the Director General, Directors and senior officials of the Department.

Commending the vital role played by Sri Lanka Customs in generating much-needed state revenue and contributing to economic and social stability, the President expressed his appreciation to the entire Customs employees for their commitment and service.

Emphasizing that Sri Lanka Customs is one of the country’s key revenue-generating institutions, the President highlighted the importance of maintaining operations in an efficient, transparent and accountable manner. The President also called upon all officers to work collectively, with renewed plans and strategies, to lead the country towards economic success in 2026.

The President further stressed that the economic collapse in 2022 was largely due to the government’s inability at the time to generate sufficient rupee revenue and secure adequate foreign exchange. He pointed out that the government has successfully restored economic stability by achieving revenue targets, a capability that has also been vital in addressing recent disaster situations.

A comprehensive discussion was also held on the overall performance and progress of Sri Lanka Customs in 2025, as well as the new strategic plans for 2026, with several new ideas and proposals being presented.

Sri Lanka Customs currently operates under four main pillars, revenue collection, trade facilitation, social protection and institutional development. The President inquired into the progress achieved under each of these areas.

It was revealed that the Internal Affairs Unit, established to prevent corruption and promote an ethical institutional culture, is functioning effectively.

The President also sought updates on measures taken to address long-standing allegations related to congestion, delays and corruption in Customs operations, as well as on plans to modernize cargo inspection systems.

The discussion further covered Sri Lanka Customs’ digitalization programme planned for 2026, along with issues related to recruitment, promotions, training and salaries and allowances of the staff.

Highlighting the strategic importance of airports in preventing attempts to create instability within the country, the President underscored the necessity for Sri Lanka Customs to operate with a comprehensive awareness of its duty to uphold the stability of the State, while also being ready to face upcoming challenges.

The discussion was attended by Minister of Labour and Deputy Minister of Finance and Planning, Dr. Anil Jayanta Fernando, Deputy Minister of Economic Development, Nishantha Jayaweera, Secretary to the President, Dr. Nandika Sanath Kumanayake, Deputy Secretary to the Treasury, A.N.Hapugala, Director General of Sri Lanka Customs,  S.P.Arukgoda, members of the Board of Directors and senior officials of the Department.

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