Sri Lanka IRD field program initiatives were rolled out in Colombo and surrounding suburbs to improve tax compliance and formally expand the national tax base, as authorities step up efforts to stabilise public finances.
Sri Lanka IRD field program targets wider tax base and compliance
Sri Lanka IRD field program operations have been launched as part of a targeted effort by the Inland Revenue Department to broaden the country’s tax base and strengthen compliance across key commercial areas. The initiative, centred in Colombo and its suburbs, marks a renewed push by fiscal authorities to improve revenue administration amid ongoing economic recovery efforts.
According to the Ministry of Finance, the special field observation program is designed to identify gaps in tax registration and compliance while offering practical support to businesses and individuals. Officials said the approach combines monitoring with advisory services, allowing tax officers to engage directly with taxpayers and resolve issues encountered during routine business activities.
A central objective of the program is to verify whether business establishments operating within designated areas are properly registered with the Inland Revenue Department. Officers are also tasked with reviewing existing tax files to ensure that information is accurate and up to date, reflecting current business operations and income levels. This verification process is expected to improve the quality of tax data and reduce discrepancies that undermine revenue collection.
The initiative also focuses on identifying businesses and individuals who are eligible to pay taxes but remain outside the formal tax system. By bringing such entities into the revenue net, authorities aim to expand the tax base without increasing rates, a strategy seen as critical to sustaining public finances while supporting economic growth.
In addition to enforcement and verification, the Sri Lanka IRD field program places emphasis on on-site guidance. Tax officers are authorised to provide immediate solutions and advice on tax-related matters that arise during business operations, helping taxpayers better understand their obligations and reduce unintentional non-compliance. Officials believe this hands-on approach can improve voluntary compliance and build long-term trust between taxpayers and the state.
Deputy Minister of Economic Development Nishantha Jayaweera, who participated in the program, highlighted the importance of effective direct tax management in ensuring macroeconomic stability. He noted that strengthening revenue collection remains a key pillar of the government’s broader economic strategy, particularly as the country works to restore fiscal discipline.
Addressing concerns from the business community, the deputy minister stressed that the field initiative is not intended to disrupt commercial activity or create unnecessary burdens. Instead, he said, it represents a step towards establishing a more equitable tax system where obligations are shared fairly across the economy.
He also underscored the importance of improving the relationship between the public and the government in achieving national revenue targets. By engaging directly with taxpayers and addressing concerns at ground level, authorities hope to foster cooperation rather than confrontation, making compliance a more transparent and predictable process.
Fiscal analysts say the program reflects a broader shift in tax administration towards compliance-driven expansion rather than reliance on rate hikes. With a limited pool of registered taxpayers, expanding the base has long been identified as a structural necessity for Sri Lanka, particularly in the context of rising public expenditure and debt servicing needs.
The focus on Colombo and its suburbs is seen as a strategic starting point, given the concentration of commercial activity and service-sector businesses in these areas. If successful, similar field programs could be extended to other urban and semi-urban regions, gradually improving nationwide tax coverage.
By combining enforcement, data verification, and taxpayer education, the Sri Lanka IRD field program seeks to address long-standing weaknesses in revenue mobilisation. Officials say sustained implementation will be crucial to ensuring that gains from the initiative translate into stable and predictable government revenue over the medium term.
As Sri Lanka continues its economic recovery, effective tax administration remains central to funding public services and reducing reliance on external borrowing. Authorities view initiatives such as this field program as an essential step in aligning revenue collection with broader development and fiscal sustainability goals.