All major collection agencies exceed targets; government optimistic on forex earnings despite slow capital spending
Sri Lanka’s tax revenue collection has surged past Rs. 1.7 trillion by the end of May, with all major tax agencies surpassing their individual collection targets, according to Economic Development Deputy Minister Prof. Anil Jayantha Fernando.
Speaking to TVDerana on Monday (June 2), Prof. Fernando said that the combined efforts of the Inland Revenue Department (IRD), Sri Lanka Customs, and the Excise Department led to a total tax collection of Rs. 1,789 billion by May’s end—well above the projections set for the period.
The IRD brought in Rs. 907 billion, exceeding its Rs. 900 billion target. Sri Lanka Customs collected Rs. 780 billion, surpassing its Rs. 730 billion benchmark. Meanwhile, the Excise Department generated Rs. 102 billion against a target of Rs. 98 billion.
Fernando also highlighted that foreign exchange outflows for vehicle imports had reached $400 million by the end of May. He expressed confidence that the government would meet, or potentially surpass, its full-year foreign exchange target of $1 to $1.2 billion, contributing further to revenue generation.
Despite the positive tax and forex indicators, capital expenditure remains sluggish. The government has spent only 12% of the Rs. 1.4 trillion allocated for capital expenditure as of May. This is partly due to delays in procurement and implementation, as the budget was approved only in March, with actual spending beginning in April.
In 2024, only 53% of the capital allocation was utilized, compared to 62% in 2023. Fernando noted that while about Rs. 600 billion is earmarked for the continuation of existing projects and expected to be fully utilized, new projects have seen just 10-12% of their allocated funds spent so far—a challenge that remains unresolved.