Finance minister hugely exaggerates revenue reduction in 2021

Fact Check

To check this claim, FactCheck.lk consulted the Weekly Economic Indicators of the Central Bank of Sri Lanka (CBSL) and the Ministry of Finance (MoF) Annual Report.  

Due to some ambiguity of meaning based on comparing the Hansard translation with the video of his speech (see Additional Note on website), FactCheck.lk evaluated the statement on two possible interpretations of the revenue reduction comparison made by the Minister: 

(a) 2021 revenue reduction compared with government revenue for the corresponding period in pre-Covid-19 years 

(b) 2021 revenue reduction compared with government’s revenue estimate for 2021 

(a) Revenue in 2021 compared with pre-covid revenue: Data on government revenue is available for the period January to July 2021 (See Exhibit 1). For the first seven months of this year government revenue was LKR 799.8 billion. The highest pre-covid level of revenue was recorded in 2018. The revenue in January-July 2021 was LKR 285.2 billion lower than it was in 2018.  

Even in comparison with the highest revenue in the pre-covid period, the decline of revenue in 2021 is an order of magnitude less than the figure of LKR 1,600 billion claimed by the finance minister. The figure he quotes is more than five times the amount calculated on this basis. 

(b) Revenue in 2021 compared with estimated revenue: The 2020 MoF Annual Report projects a revenue of LKR 1,961 billion for the full year 2021. Pro-rating this revenue to a seven-month period yields a projected revenue of LKR 1,144 billion for January-July 2021. The actual revenue in January-July 2021 is less than the projected revenue for this period by LKR 344.2 billion.  

When compared with the projected year-to-date revenue (to the end of July), the decline of actual year-to-date revenue in 2021 is an order of magnitude smaller than the figure claimed by the finance minister. 

On either of the two interpretations of revenue shortfall claimed by the Minister, there is a huge order of magnitude discrepancy between the claim and the actual figures. Therefore, we classify the finance minister’s statement as BLATANTLY FALSE. 

Additional Note: 

FactCheck.lk notes a discrepancy between the statement attributed to Finance Minister Basil Rajapaksa in the Hansard and the statement actually delivered by the minister in parliament. The statement from the Hansard could be translated as: “Especially due to the COVID-19 pandemic, Rs. 1500-1600 billion has reduced from the revenue that we should have generated during this year alone. That is even higher than the amount we estimated to be the revenue we would generate for sure”. However, the minister’s statement delivered in parliament could be translated as, “Especially, during this time of time of the pandemic, in this year alone, between Rs. 1,500 – 1,600 billion has reduced up to now from the revenue we should have received, this amount is [the shortfall] compared to the amount we estimated”.  

*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.