Sri Lanka widening tax net efforts have gained momentum as senior finance and revenue officials examine new measures to strengthen compliance. The discussion focused on reducing administrative barriers and creating a smoother process for taxpayers across the country.
Sri Lanka widening tax net as officials push simplified tax processes
Sri Lanka’s finance authorities have intensified their commitment to improving tax administration as part of a broader plan to widen the nation’s tax net and modernize the systems used by individuals and businesses. A recent discussion held at the Finance Ministry explored practical steps to expand government revenue while removing unnecessary administrative hurdles that have long affected the tax filing experience.
The meeting was chaired by Deputy Minister of Economic Development Nishantha Jayaweera and included the participation of Commissioner General of Inland Revenue Rukdevi Fernando alongside senior ministry officials. Their focus centered on improving tax compliance rates by making it easier for citizens to file returns, receive guidance, and understand their obligations. According to the Ministry’s statement, the officials emphasized the need to strengthen voluntary compliance and ensure that taxpayers are well informed about procedures, deadlines, and updates to the tax system.
The Deputy Minister instructed the Inland Revenue Department to prioritize the removal of delays and procedural burdens that often discourage timely filing. He stressed the importance of simplifying tax return formats so that individuals and businesses can submit accurate information without relying heavily on intermediaries. This push aligns with the government’s objective of streamlining its public service processes while raising overall state revenue.
A significant part of the discussion focused on the need for a practical, near-term program that would support the Ministry’s annual revenue goals. Such a program is expected to detail steps on digital filing improvements, taxpayer education campaigns, and operational adjustments within the Inland Revenue Department. Officials noted that any improvements must be implemented urgently to support ongoing fiscal requirements and to align revenue collection strategies with the country’s medium-term economic goals.
During the session, participants also reviewed the government’s updated tax projections for 2025 and the rationale behind revisions introduced in the latest budget. Sri Lanka has raised its revenue expectations for next year due to stronger-than-anticipated performance in income tax collections and levies on goods and services. These gains have been driven mainly by higher vehicle import-related taxes and broader enforcement measures.
Initially, the government aimed to achieve total tax revenue of 4,590 billion rupees for 2025. However, updated estimates now place the target at 4,725 billion rupees, reflecting a 2.9 percent increase. The revised figures indicate the administration’s confidence in its current revenue trajectory and the potential effectiveness of ongoing reforms to widen the tax base. The latest budget document outlines that the income tax target for 2025 has been increased by 3.7 percent to 1,210 billion rupees, while levies on goods and services have been raised by 6.5 percent to 2,953 billion rupees.
These projections highlight the government’s reliance on enhanced revenue tools to maintain fiscal stability and fund public services. A broader tax net is seen as a crucial component of this strategy, particularly as the country manages economic adjustments and continues to implement long-term recovery policies. Expanding the tax base is also expected to reduce pressure on compliant taxpayers, ensuring the system is more equitable and aligned with international best practices.
The discussion concluded with agreement among officials that consistent communication, user-friendly mechanisms, and reduced red tape are essential to achieving the desired results. As Sri Lanka widening tax net initiatives gain speed, authorities aim to combine administrative reforms with improved outreach efforts so taxpayers can better understand changes and adhere to their responsibilities. With updated revenue targets and renewed focus on compliance, the government expects these measures to make the tax system more effective in the coming year.