Government revenue targets set by the 2011 budget have fallen short by Rs.33.59 billion from the estimated revenue last year, official sources said. According to the government’s Annual Accounts for 2011, total receipts and grants in the year was Rs. 974.297 billion against estimated revenue of Rs. 1.007 trillion.
|Banking and Finance Commission to be set up
A Banking and Financial Commission is to be set up soon to make the necessary changes in the financial sector going beyond the regulatory and conventional aspects, official sources said.
The President in his capacity as Finance Minister has made this proposal to further enhance state revenue because reducing taxes or long term lending alone is not enough for economic development in the country, a top government official said.
“Sri Lanka is now on a journey that will adequately compensate what the country lost over 26 years of terror and banks are the critical institutional set up to drive this economic development process,” he told the Business Times.
The proposed Commission will conduct public hearings, discussions with bankers, share international experience and propose required changes beyond the regulatory and conventional aspects.
It will also look at the prospects of introducing a wider range of new products in credit, equity, insurance, leasing, merchant banking, investment banking and project financing to drive development, he disclosed.
The Inland Revenue (Tax) Department has achieved 99% of the revenue target of Rs. 307 billion set for 2011 while other major revenue collection bodies including the Customs were slightly short of the targets, the sources added.
Customs and the Excise Department considered as main pillars in the local tax system, have been able to contribute Rs. 446 billion and Rs. 55 billion, respectively to the state revenue last year. The Motor Traffic Department has doubled revenue to Rs 8.3 billion last year, according to official figures.
The accounts for the year 2011 were prepared and forwarded to the Auditor General by the Treasury on Tuesday. The government was able to maintain the overall expenditure within the limit approved by the Parliament, official sources revealed.
According to the accounts, the total actual expenditure in terms of government accounts is Rs. 1.961 trillion which consists of Rs. 1.020 trillion recurrent expenditure and Rs. 398.519 billion capital expenditure. The total debt repayment was Rs. 542.337 billion,
The original total estimated expenditure for 2011 including debt repayments was Rs.1.968 trillion.
The Auditor General in his earlier 2010 report noted that a stringent mechanism should be implemented to minimize the loss of revenue to the state due to ‘large scale tax frauds’ of certain importers by presenting under-valued invoices when importing goods,
Special investigations on state revenue management carried out by the Auditor General Department had revealed that the country’s revenue collection system was weak, ineffective, erroneous and inefficient.