In a move to strengthen tax compliance and administration, the Sri Lankan government has announced a new regulation mandating information sharing with the Commissioner General of Inland Revenue (CGIR). This initiative, outlined in Gazette number 2376/25 issued by President Ranil Wickremesinghe, will come into effect on April 1st, 2024.
The new regulation casts a wider net, encompassing various institutions and select public sector personnel. Effective from the designated date, these entities will be required to provide specific information, as outlined in Schedule I of the notice, to the CGIR on a quarterly or monthly basis. This data will be integrated into the Revenue Administration Management Information System (RAMIS) for efficient tax risk management.
Financial institutions, including banks and non-banking institutions regulated by the Central Bank of Sri Lanka and the Colombo Stock Exchange, are at the forefront of this initiative. These entities are obligated to submit information on a quarterly basis, with a deadline set for the 20th day of the month following each quarter’s end. Notably, if such information is not currently maintained, individuals and institutions are mandated to begin record-keeping practices by July 1st, 2024, to comply with the regulation.
The scope of information to be shared varies depending on the institution. Banks and leasing companies will be required to furnish details on current account holders’ balances, loans and advances, leasing contracts, and all information shared with the Credit Information Bureau (CRIB). The Colombo Stock Exchange (CSE) will contribute by providing data on investors’ shareholding and value, along with other relevant details. Additionally, the Registrar General’s Department will participate by supplying information on land and property transactions. The Registrar General of Companies and the Department of Motor Traffic are also listed among the mandated institutions.
The regulation extends its reach beyond financial institutions, encompassing select public sector personnel. Those in charge of awarding contracts for the supply of goods, services, or consulting services are required to furnish monthly information to the CGIR.
To ensure smooth implementation, the CGIR will take the initiative of notifying individuals and government institutions of the official commencement date for information submission under Schedule I. These notifications will be delivered through written notices or public announcements.
This new regulation marks a significant step towards enhanced tax compliance in Sri Lanka. By expanding the information available to the CGIR, the government aims to improve tax administration and effectively manage tax risks.