Government spending in Sri Lanka impacts tax revenue, shaping economic policies.
The study looked at how government spending and tax revenue in Sri Lanka are related from 1990 to 2017. They found that there is a long-term connection between government spending and tax revenue. The results showed that government spending influences tax revenue, but not the other way around. This suggests that Sri Lanka needs to make smart decisions about how it spends and collects money to help its economy grow.