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Tax revenue rebound seen as reshaping SL's sovereign risk outlook
The Island
|December 17, 2025
Sri Lanka's improving tax performance is reshaping its sovereign risk outlook.
With the tax-to-GDP ratio rebounding to 15.4% from pre-crisis lows near 10%, markets are seeing early signs that fiscal consolidation is becoming structurally anchored-supporting debt sustainability, IMF programme credibility and a gradual return to capital markets.Finance and Planning Deputy Minister Dr. Anil Jayantha Fernando said on Monday that tax revenue is on track to reach 16% of GDP by the end of this year, marking one of the strongest fiscal reversals in the country's recent history. Speaking at a ceremony at the Inland Revenue Department (IRD) to present appointment letters to 100 newly recruited Assistant Commissioners, he said all three main revenue-collecting agencies the IRD, Sri Lanka Customs and the Excise Department-have exceeded their annual targets.
This story is from the December 17, 2025 edition of The Island.
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