COLOMBO, July 2 (Reuters): Sri Lanka's tax revenue has fallen more than 15 per cent from its target in the first four months of the year but it can still achieve its 2014 budget deficit target of 5.2 per cent of GDP, the finance ministry said on Wednesday.
The government had estimated a tax revenue of 368 billion rupees ($2.82 billion) at the end of April, but the collection is down 15.6 per cent to 310.6 billion rupees, the ministry's mid-year fiscal position report showed.
The International Monetary Fund said last month that "low tax revenue mobilisation remains a concern" amid relatively high debt levels and an ongoing shift from concessional to more expensive loans on commercial terms.
The budget deficit in the first four months hit 347 billion rupees, or 3.5 per cent of gross domestic product (GDP), compared with the full-year deficit target of 5.2 per cent of GDP or 516.1 billion rupees, data showed.
However, the finance ministry said revenue would be higher during the second half due to improved tax collection and stronger domestic economic activities from lower interest rates.
"This improvement together with closer monitoring of public expenditure management within the overall budgetary ceilings is expected to be conducive to maintaining annual budget deficit at 5.2 per cent of GDP as announced in budget 2014," it said.
The deficit fell to 5.9 per cent of GDP in 2013 from 6.4 per cent a year earlier.
Sri Lanka's credit growth decelerated 3.3 per cent in April, its worst performance since January 2010, and compared with 4.3 per cent growth in March.
Despite lower credit growth and imports, the $67 billion economy expanded 7.6 per cent in the March quarter, which analysts attributed to strong government spending on massive infrastructure projects financed with external commercial funds.
Sri Lanka tax revenue down
FE Team | Published: July 03, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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