Govt. revenue in first half slumps amid lockdowns

• Revenue fell 16% from target set for first half
• All types of tax revenue down significantly from the targets
• Non-tax revenue amounted to only 19% of annual target
• Govt. revenue slightly increased during first 4 months prior to lockdowns  

By Nishel Fernando 
Government revenue during the first half of the year trailed sharply below the targets due to imposed island-wide travel restrictions to contain the third COVID-19 wave in the second quarter.

State Minister of Money & Capital Market and State Enterprise Reforms, Ajith Nivard Cabraal revealed that government revenue fell by 16 percent from the target set for the first half of the year due to travel restrictions.
During the period, the government was only able to collect 33 percent from custom duties, 40 percent from Inland Revenue taxes and 42 percent from excise duties of the annual target. 

The contribution from non-tax revenue was only at 19 percent of the annual target for the year at the end of the period.

According to official data, government revenues slightly improved to Rs.481.7 billion in the first four months (January-April) of the year compared to Rs.476.7 billion in the same period of last year.

Strict island-wide travel restrictions came into force in the third week of April.

However, the State Minister noted that the government was able to maintain its expenditures under control during the period. 

According to him, the utilisation of recurrent expenditure in the six-month period was at 48 percent from the earmarked annual amount despite expenditures on vaccinations and other pandemic-related measures. 

Meanwhile, the utilisation of the capital budget stood at 29 percent in the first half of the year. Overall, the budget deficit in the first four months expanded to Rs.520.5 billion from Rs.452 billion a year earlier. 

Cabraal expects government revenue collections to improve in the second half of the year almost touching the revenue target for the year.