Sri Lanka revenue agencies are on track to surpass their 2025 tax targets, Deputy Minister Nishantha Jayaweera confirmed. Despite the financial impact of Cyclone Ditwah, the Inland Revenue, Customs, and Excise Departments are poised for stronger collections than projected.
Sri Lanka revenue agencies expected to surpass 2025 targets despite cyclone relief
Sri Lanka’s key revenue agencies are expected to exceed their 2025 tax targets by an estimated Rs. 400 billion, signaling a robust fiscal performance despite the financial challenges posed by Cyclone Ditwah. Deputy Minister of Economic Development, Nishantha Jayaweera, provided these details in a press briefing, emphasizing that the budget deficit is likely to remain below initial projections.
The Inland Revenue Department is on course to surpass its target of Rs. 2,195 billion by approximately Rs. 50 billion. This performance reflects sustained compliance efforts and efficient revenue collection strategies across income, corporate, and value-added tax categories.
Meanwhile, the Department of Customs has already exceeded its Rs. 2,115 billion target by Rs. 280 billion and is expected to maintain this momentum through the remainder of 2025. Strong import-related collections and effective enforcement measures have contributed to this surplus, demonstrating resilience in trade-related revenue streams.
The Department of Excise is also performing above expectations, projected to exceed its target of Rs. 228 billion by around Rs. 4 billion. Excise duties on alcohol, tobacco, and petroleum products continue to provide steady fiscal inflows, despite minor disruptions from the cyclone.
Cyclone Ditwah, which impacted multiple regions in 2025, is likely to slightly reduce some excise revenues and value-added tax collections due to temporary business interruptions. However, overall revenue targets remain achievable, as the government has efficiently managed the Rs. 72 billion cyclone relief spend within existing budget limits.
Jayaweera highlighted that exceeding revenue targets underscores the resilience and adaptability of Sri Lanka’s tax administration framework. “Our key agencies have shown exceptional performance this year. Even with the unforeseen expenditure caused by Cyclone Ditwah, we are confident of surpassing our 2025 fiscal targets, supporting economic stability and enabling continued development,” he said.
The strong revenue performance also provides the government with flexibility to maintain essential public services, infrastructure projects, and disaster recovery programs without resorting to excessive borrowing. Analysts note that achieving these targets contributes positively to fiscal credibility, investor confidence, and the broader economic recovery of Sri Lanka.
This fiscal discipline, combined with strategic enforcement and compliance measures, is expected to strengthen domestic revenue mobilisation while reducing reliance on external funding. By meeting and exceeding targets across multiple departments, Sri Lanka demonstrates the capacity of its revenue agencies to maintain financial stability amid natural and economic challenges.
Looking ahead, the government aims to sustain this trajectory through improved tax policy implementation, technological upgrades in collection systems, and ongoing monitoring of economic indicators. The collective performance of the Inland Revenue, Customs, and Excise Departments is crucial for balancing public expenditure, reducing fiscal deficits, and supporting long-term economic growth.
In conclusion, Sri Lanka’s tax authorities are showcasing their ability to exceed expectations even under challenging conditions. The Inland Revenue, Customs, and Excise Departments have collectively ensured that 2025 revenue targets are not only achievable but likely to surpass projections, providing the government with a stronger financial foundation for the years ahead.