Govt. expects increased tax revenue next year
 

by Channa Kasturisinghe

The Government will continue to increase tax revenue considerably reversing a declining trend prevailed over the last few years, said Director, Fiscal Policy Department of the Ministry of Finance S.R. Attygalle.

Addressing a post Budget seminar at the Sri Lanka Foundation Institute yesterday Attygalle said, since 1990 tax revenue declined and the appropriate tax measures taken by the Government have helped reversing this trend.

"In 1990 the tax revenue was 19 percent of the GDP. It sharply declined over the years and in 2003 it was recorded at 13.2 percent of the GDP. However, up to September 2005 all major taxes have shown considerable increase. Tax revenue in 2004 was 13.8 percent of the GDP but we have been able to increase it up to 14.7 percent in 2005. This has been possible as we placed main thrust on tax administration and due to appropriate tax measures," Attygalle said.

He said tax revenue was recorded at Rs. 345 billion up to September 2005. the Government plans to increase it up to Rs. 431 billion by end of next year. M. R. D. Senanayake of the National Budget Department said the policy priorities of Budget 2006 based on the Development Forum held this year in Kandy will comply with achieving the Millennium Development Goals.

"This medium term budget focused on 9 sectors which included pro-poor and pro-growth, human resource development and infrastructure development. These sectors were given higher priority and more resources were allocated to these sectors. For example, when it comes to spending on infrastructure development the government will have in mind the goal of providing electricity to 80 percent of the country's population by 2008," he said.

R.A Jayatissa a senior official of the Ministry said that in 2005 all three price indicators have shown a decline compared to the corresponding period of the previous year and the prospects are very good for the next year as far as controlling inflation is concerned. "We expect the exports to grow at 10 percent.

The current account deficit will decline to around 3.5 percent of the GDP," he said.