Sri Lanka Economic and Public Debt Analysis
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and simultaneously adopted a first batch of fiscal reforms that will be complemented by new
measures implemented towards the 2023 budget
The Government took courageous measures to restore public finance sustainability, relying on a balanced mix between revenue
enhancement, expenditure rationalization and measures minimizing fiscal risks from SOES
Revenue-enhancement
Increasing tax rates (Personal Income Tax (PIT), Corporate
Income Tax (CIT), Value Added Tax (VAT),
Telecommunication Levy and Betting and Gaming Levy)
<> Broadening tax bases (PIT and VAT)
Removing tax exemptions (CIT, VAT)
Increasing tax compliance through strengthening tax
administration
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Expenditure-rationalization
Better targeted allocation of resources focusing on the
most vulnerable segments of the economy
Minimizing fiscal risks from SOEs
e.g., cost-recovery based pricing for fuel and electricity
(significant increases already implemented)
Sources: Ministry of Finance, Economic Stabilization and National Policies, Central Bank of Sri Lanka
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