Treasury seeks public proposals to lift revenue to 20% of GDP

Thursday, 4 June 2026 00:25 - - {{hitsCtrl.values.hits}}

The Finance, Planning and Economic Development Ministry has called for public proposals on revenue enhancement strategies as the Government seeks to strengthen tax collection and increase revenue performance towards its long-term fiscal targets.

The call comes as the Government seeks to consolidate recent gains in revenue mobilisation under its International Monetary Fund (IMF)-supported reform program.

The IMF has noted that revenue collection has outperformed expectations and remains a key pillar of the country’s fiscal adjustment efforts.

However, the Fund has also cautioned that external shocks linked to the Middle East conflict have worsened Sri Lanka’s economic outlook, with growth now projected to slow to 3% in 2026.

Against this backdrop, policymakers face the challenge of sustaining fiscal consolidation while broadening the tax base, improving compliance, and reducing reliance on tax rate increases to strengthen public finances over the medium term.

Government revenue recorded a strong recovery in 2025, reaching nearly 15.4% of GDP, reflecting the impact of tax reforms, improved compliance, stronger revenue administration, and the resumption of vehicle imports.

In a public notice issued by the Revenue Management Committee (RMC), established under the Public Financial Management Act, No. 44 of 2024, the Ministry invited policy recommendations, analytical submissions, and reform proposals from think tanks, universities, professional bodies, private sector entities, non-Governmental organisations, and individuals with expertise in fiscal policy. The Committee said it was seeking evidence-based proposals aligned with the Government’s medium- to long-term objective of increasing Government revenue performance towards 20% of GDP.

According to the notice, proposals may cover a range of areas, including strategies to increase Government revenue, formalisation of the informal economy, broadening the tax base, digitalisation of revenue-collecting agencies, improvements to tax administration and voluntary compliance, technology-driven revenue systems, and international best practices in tax policy and revenue administration.

The call reflects growing recognition that sustaining higher revenue collection will require structural reforms beyond tax rate increases. Policymakers and international institutions have repeatedly highlighted the need to improve compliance, reduce leakages, strengthen tax administration, and bring more economic activity into the formal sector.

The Ministry said submissions should include a summary of the proposed reform or revenue measure, implementation mechanisms, expected fiscal and administrative impacts, associated risks, and supporting analysis. Institutions are required to provide registration details, while individual applicants may voluntarily submit identification information.

Proposals must be submitted in PDF format to the RMC by 16 June. The Committee said it reserves the right to accept, reject, or seek further clarification on submissions, while selected organisations and individuals may be invited to present their proposals at future meetings of the RMC.