DEW: Govt revenue could be even less than nine percent of GDP now

Apropos ‘DEW: Tax amnesty unconstitutional, encourages corruption’ in July 24th edition of The Island, it has been inadvertently reported that by 2019, the government revenue had dropped to 19 percent of the Gross Domestic Product (GDP). What the former Minister actually told The Island was that by 2019 the situation was so bad the government revenue was just 09 percent of the GDP. At the time of Dr. N.M. Perera’s tenure as the Finance Minister, the government revenue had been 24 percent of the GDP. Gunasekera said it could be even less now. According to him, one of the primary reasons for the crisis and overall chaotic situation was the wide gap in direct and indirect tax. Ideally direct and indirect taxes should be 65 percent and 35 percent, respectively though at present indirect taxes stood at 85 percent and direct just 15 percent.