Finance Minister Mangala Samaraweera has also sought cabinet approval for spending of 3.98 trillion rupees next year, up 10.5 percent from its estimate for this year, government data showed.

Finance Ministry officials, however, said the government would stick to its medium-term budget deficit target of 3.5 percent of GDP by 2020.

The government last month said it would cut spending to stick to its 2017 budget deficit target of 4.6 percent of gross domestic product (GDP) and compensate for a fall in revenue.

The government said last week that higher debt repayments next year will reduce its ability to increase economic growth.

The government has blamed "colossal borrowing" by the previous administration for a spike in its debt-servicing costs. The previous government borrowed heavily to rebuild infrastructure after a 26-year civil war ended in 2009.

Sri Lanka has already passed tax reforms to widen the tax base and increase government revenue, as agreed with the International Monetary Fund in exchange for a $1.5 billion, three-year loan.

The Inland Revenue Act, for example - Sri Lanka's biggest major tax reform since it gained independence from Britain in 1948 - should increase government revenue by at least 45 billion rupees ($295 million) per year.

The IMF has pressured the island to increase revenues after repeated balance-of-payment crises that have led to a 29 percent fall in the value of the Sri Lankan rupee since 2008.