1H tax revenue nearly doubles to Rs. 697 b

Tuesday, 18 July 2023 01:10 -     - {{hitsCtrl.values.hits}}

  •  IRD Chief says grateful to “honourable taxpayers”; says upward revisions help higher revenue
  • Despite impressive tax collection Sri Lanka missed June revenue target set by IMF

 Tax revenue collection in the first half of this year has nearly doubled to Rs. 697 billion boosted by higher VAT.

Inland Revenue Department  Commi-ssioner General D.R.S. Hapuarachchi revealed that collection during January to June 2023 was Rs. 696.94 billion, as against Rs. 361.8 billion a year ago reflecting a hefty increase of 92.5% or Rs. 335 billion.

He said that factors such as decisive changes to the tax policy, the gradual recovery of the economic situation and the efficiency of the efforts of the IRD were the reasons for this positive growth.

The Commissioner said he was grateful to "honourable taxpayers" for their cooperation to uplift the economic strength of the country and the officers of public and private institutions who supported in various ways for this success.

The biggest incr-ease was in the Value Added Tax (VAT) from Rs. 121.5 billion in 1H of last year to Rs. 230.6 billion. Corporate and non-corporate income tax amounted to Rs. 243.8 billion up from 

Rs. 213.4 billion. 

The new Social Security Contribution had racked in Rs. 80 billion whilst Advanced Personal Income Tax collection was Rs. 70 billion as against Rs. 12 billion a year ago. Withholding Tax brought in Rs. 68 billion as opposed to Rs. 8.6 billion in 1H of 2022.

Despite the impressive tax collection, Sri Lanka had missed the June revenue target set by the IMF according to the Central Bank Governor Dr. Nandala Weerasinghe.

According to analysts this may explain why the Government resorted to a drastic 20% hike in taxes on cigarettes and liquor recently which drew flak from producers. Analysts also opined efforts to lift restrictions on the majority of imports were also to shore up revenue from inward trade. Cumulative import expenditure during January to May 2023 declined by 22.8% to $6.8 billion from a year ago.