Estimating the Impact of Fiscal Policy on Inequality and Poverty in Sri Lanka

This study will assess the incidence of major tax and transfer programmes in Sri Lanka and examine how these have affected the country’s fiscal policy. It will employ methodology developed by the Commitment to Equity Institute at Tulane University and data from the 2019 Household Income and Expenditure Survey (HIES).

Since 2019, Sri Lanka’s fiscal position has significantly changed due to the COVID-19 pandemic, the current economic crisis, and tax policies introduced post-2019. By simulating the effects of these changes, this study will examine how these changes have impacted the distribution of major tax and transfer programmes in the country. Accordingly, the findings of this study will inform the fiscal policy adjustments that are being designed to improve government financing in Sri Lanka.

Research team

Dr Nisha Arunatilake
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Priyanka Jayawardena
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Usha Perera
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Funding

World Bank