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Dwindling tax base and shrinking tax revenue in Sri Lanka
Taxation is necessary to raise money to finance public expenditure, as well as one of the main weapons used by the Government of the day in managing the economy. This includes the use of the tax system to offer incentives to earn and save.
Too much spending by the Government, accompanied by too little taxation, will cause inflation, which can lead to recession.
Sri Lanka, a country with 20.2 million people, has income tax payers of 897,000 persons. This figure includes 530,000 people paying taxes through the pay as you earn (PAYE) scheme and 367,000 others.
Too much spending by the Government, accompanied by too little taxation, will cause inflation, which can lead to recession.
Sri Lanka, a country with 20.2 million people, has income tax payers of 897,000 persons. This figure includes 530,000 people paying taxes through the pay as you earn (PAYE) scheme and 367,000 others.
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As the Treasury vows to stick to targets this year, the budget deficit for the month of January 2012 ballooned 75.14 percent from a year earlier with expenditure growth outpacing revenue growth, latest data released by the Central Bank showed. Total revenue including grants grew 12.13 percent year-on-year in January to Rs. 75.8 billion with total expenditure growing 39.37 percent to Rs. 166 billion. According to our estimates, the budget deficit in January, amounting to Rs. 90.2 billion, up 75.14 percent from a year earlier, is about 1.2 percent of GDP. Treasury Secretary said the government would stick to this year s fiscal targets. He said the recent policy reversals resulting in the increase of utility and trade tariffs were revenue neutral and would not result in lower inflows to the government coffers
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