Sri Lanka's Unique Revenue Problem

Abstract

Tax to GDP and GDP per capita for most South Asian countries shows a positive relationship. For example, Bhutan had a tax to GDP of 10% in and GDP per capita of 4% in the year 2000. By 2020, tax to GDP had risen to just over 12% with GDP per capita being just under 16%. However, Sri Lanka has a unique revenue problem. The share of tax revenue to GDP has declined with an increasing GDP per capita, across 2000 to 2020.