📈 Sri Lanka Posts Rs. 105 Bn Budget Surplus as Vehicle Taxes Drive Revenue Surge

Sri Lanka’s fiscal position strengthened sharply in Jan-Apr 2026, recording an overall Budget surplus of Rs. 105.00 Bn, reversing a Rs. 261.60 Bn deficit from the same period last year. • Overall Fiscal Performance: Total revenue and grants jumped 34.6% YoY to Rs. 1.96 Trillion, outpacing an 8.0% increase in total expenditure (Rs. 1.85 Trillion). The primary surplus expanded to Rs. 862.70 Bn, aided by a 4.6% decline in interest costs to Rs. 757.70 Bn. • Sector & Agency Breakdown: Sri Lanka Customs overtook the Inland Revenue Department as the top collector, contributing 49% (Rs. 876.00 Bn) of total tax revenue. The surge was driven by the resumption of motor vehicle imports, with motor vehicle excise revenue skyrocketing by 251.7% YoY to Rs. 187.10 Bn (up from Rs. 53.20 Bn). VAT on imports also rose 35.0% to Rs. 299.90 Bn. • Domestic Revenue: Total tax revenue rose 31.7% YoY to Rs. 1.78 Trillion. Taxes on goods and services remained the largest source at Rs. 1.21 Trillion (62% of total revenue), where total VAT contributed Rs. 677.40 Bn. Income tax revenue grew 13.2% to Rs. 310.20 Bn, supported by domestic economic recovery. • Expenditure & Targets: Recurrent expenditure rose 5.1% to Rs. 1.69 Trillion. Capital spending increased 49.3% to Rs. 168.60 Bn, though execution remains slow with only 9.8% of the annual capital allocation utilized. Overall, the government has secured 36.9% of its full-year Rs. 5.30 Trillion revenue target.