The Inland Revenue Department (IRD) is exceeding its revenue collection targets, and the stronger performance could create room for future tax relief, Presidential Secretary Dr. Nandika Sanath Kumanayake said in Colombo.
Speaking at the 52nd Annual General Meeting of the Staff Officers’ Association of the Inland Revenue Department, Kumanayake said the Department continues to record collections above expected levels.
He acknowledged widespread unease over Pay-As-You-Earn (PAYE) taxation among both public and private sector employees, many of whom view the deduction as income that could otherwise go toward household needs. But he cautioned that relief cannot come first: revenue collection must be strengthened through broader compliance and an expanded tax base before the government can reduce burdens on middle-income earners and public servants.
Kumanayake said improving compliance and widening the tax net would give the government greater flexibility to lower taxes that directly affect ordinary citizens.
He identified digitalisation as a key weakness. The IRD has not yet reached the level of digital transformation required, he said, and accelerating that work would simplify procedures, improve efficiency and make compliance more convenient for taxpayers — while also strengthening the state’s capacity to collect.
Plans are underway to establish a dedicated unit within the Presidential Secretariat to monitor and support reform, efficiency and innovation across state revenue-collecting institutions, Kumanayake said.
He stressed that the reform agenda is being pursued through consultation with trade unions, departmental officials and senior administrators rather than by directive from above, with action plans built on the experience of officers already working inside the system so that changes can be introduced gradually and practically.
