Sri Lanka's fiscal woes are set to continue in 2024, with the nation on track to miss its budget revenue target for the 33rd consecutive year, according to a new report by Verité Research.

The Verité Research report, titled "State of the Budget Report 2024," paints a concerning picture for Sri Lanka's financial health.

While the government's official 2024 budget sets an ambitious revenue target of LKR 4.164 trillion, Verité Research estimates a significant shortfall of 14%.

This leaves a projected revenue of only Rs. 3.57 trillion – a stark contrast to the government's optimistic projections.

Verité Research identified overestimated tax revenue as a major source of the projected shortfall.

Their analysis suggested that the government has significantly overestimated revenue from Value Added Tax (VAT), with a potential gap of 61%.

The report also warned that projections for other major taxes such as corporate income tax, personal income tax, Social Security Contribution Levy (SSCL), and customs import duty are also likely too optimistic.

The report added that Sri Lanka currently grapples with the highest interest-to-revenue ratio globally, a key indicator of debt sustainability. Reducing this ratio is crucial for ensuring economic stability.

According to Verité Research, the government's plan to lower the ratio to 64% in the 2024 budget appears overly optimistic.