Revenue was raised by 5.4% of GDP in 3 years

Abstract

Between 2021 and 2024, Sri Lanka’s government revenue and grants rose from 8.3% to 13.7% of GDP— a 65% increase in just three years. This marks a significant turnaround from the historic low of 2021, when tax cuts substantially reduced the revenue base. The latest data, from the Central Bank of Sri Lanka’s Annual Economic Review 2024, show that government revenues have not only recovered but also exceeded pre-crisis levels. The sharp rebound was driven by a series of targeted tax reforms. A breakdown of revenue sources reveals that while most major tax categories grew, Value Added Tax (VAT) alone accounted for nearly half the total increase.