Govt. revenue jumps over 20% on excise, vehicle tax

Saturday, 15 August 2015 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The Government revenues jumped by more than a fifth in the first seven months of this year, data showed on Thursday, as the new Government sought to improve tax collection and cracked down on corruption.

The data were released ahead of a Parliamentary election on Monday in which the United National Party-led minority Government formed in January is seeking a strengthened mandate.

Sri Lanka does not usually release interim figures, but the data showed that total tax revenues had risen from January through July by 20.5%, year-on-year, to Rs. 646.2 billion ($ 4.8 billion).

Revenues from excise tax jumped over 123% to Rs. 251.6 billion, 73% of the full-year target.

“The reason for this increase is due to the crackdown on smuggled tobacco products and distilleries, along with distribution networks which were earlier flirting with tax authorities and cashing in on their political patronage,” said Danushka Samarasinghe, Research Head at Softlogic Stockbrokers.

Since taking office in January, the administration of President Maithripala Sirisena has taken steps to reduce corruption it says prevailed under his predecessor Mahinda Rajapaksa.

Rajapaksa is staging a political comeback and heading the opposition campaign in the 17 August vote.

Finance Minister Ravi Karunanayake told Reuters the excise tax take had been on the rise due to the streamlining of collection and reducing corruption and tax evasion.

Income from motor vehicle imports more than doubled to Rs. 126.1 billion in the same period, recording 97% of the full-year target.

Samarasinghe said the rise in the vehicle import duty was due to the rising demand for automobiles mainly from state workers who benefited from hikes in Government pay while an April rate cut by the Central Bank had reduced borrowing costs.