Govt. collects Rs. 274 b in January aided by higher VAT

Friday, 9 February 2024 00:40 - - {{hitsCtrl.values.hits}}

State Finance Minister Ranjith Siymabalapitiya

The Government revenue in January has shot up 25% higher than the target to Rs. 274 billion aided by increased VAT in addition to widen coverage, State Finance Minister Ranjith Siymabalapitiya told Parliament yesterday.

He highlighted that the Customs Department also exceeded its target of Rs. 114 billion for January, achieving Rs. 121 billion, marking an 11% increase over the estimated revenue.

Moreover, the Excise Department reported revenue of Rs. 14 billion, surpassing the target of Rs. 12 billion, whilst the Inland Revenue Department recorded Rs. 114 billion, exceeding the set target of Rs. 88.9 billion.

Siyambalapitiya noted that despite concerns regarding inflation following the 20% increase in VAT rate from 15% to 18%, January witnessed a manageable inflation rate of 6.4%.

He said food inflation remained low at 3.3%, attributed to the exemption of essential commodities from VAT, while non-food inflation stood at 7.9%.

“Some people speculated that prices of goods would skyrocket in January post-VAT increase. However, the inflation rate was recorded at a moderate 6.4%. We successfully managed to keep food inflation low by exempting essential commodities from VAT,” the State Minister explained.

He highlighted that the uptick in State revenue will ultimately contribute to the welfare of all citizens countrywide.