Sri Lankan Government anticipates to further increase its direct tax revenue to 40% reducing the weight given on indirect tax revenue as currently the direct tax income makes 30% contribution to the state revenue while indirect tax makes 70% from the total revenue from taxes, State Minister of Finance Ranjith Siyambalapitiya said.  

Speaking at Parliament, State Minister Siyambalapitiya said: “Earlier the indirect tax income to the Government was a whopping 80% while direct tax was a mere 20% contribution. But now it is within the ratio of 70% indirect tax and 30% direct tax respectively. Indirect tax ratio, however, is to be increased further.”

He noted that although the Government of Sri Lanka expects to increase its revenue through taxes to 15% from its gross domestic product (GDP), it is not going to be “a debt burden to everyone”, instead taxing the rich and capable. 

As a result, the tax registration system was introduced. Despite the criticism of the Opposition, such a mechanism helps in seeking the taxing potential instead of taxing everyone. The most affected from the indirect tax, is the monthly income earners due to their static income. 

Speaking to the media in Kegalle last month, State Minister Siyambalapitiya also assured that the Government has no intention to further increase the current tax percentages. Therefore,  the cost of goods will not increase as a result of a hike in indirect taxes any longer. Instead, the prices will likely be affected by factors such as the demand and supply of goods alone.

He also noted that a property tax would be introduced in 2025.

Meanwhile, speaking to TV Derana earlier this month, the State Minister said that the Government earned a revenue of Rs. 274 billion in January in contrast to its targeted revenue of Rs. 219 billion.