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Challenges and Opportunities in Implementing VAT for Fiscal Consolidation

  • Sri Lanka needs to increase revenue collection for stability and growth
  • Tax to GDP ratio is low and needs to be raised to 14%
  • Higher tax revenue is needed for quality spending on education and health
  • Failure to reach revenue target delayed IMF funding
  • Budget 2024 aims to increase tax revenue to 12.1% of GDP
  • VAT will be the main source of increased tax revenue
  • VAT accounts for a significant portion of tax collection in many countries
  • VAT revenue in Sri Lanka has declined due to policy changes and weak administration
  • Policy changes have had a significant impact on VAT revenue collection
  • Years with policy measures saw increased VAT revenue, while years with policy changes saw declines in revenue.

Source: newswire.lk

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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