More than Rs.108 billion in disputed tax revenue is tied up in an unresolved backlog at Sri Lanka’s Tax Appeals Commission, according to a National Audit Office performance report that criticises severe administrative delays at the body.
The report, covering the Finance, Planning and Economic Development Ministry for the year ended December 31, 2025, found 626 unresolved appeals registered with the commission, the Daily Mirror reported.
Nearly half the disputed value sits in a small number of large cases. Twenty appeals, each exceeding Rs.1 billion, account for Rs.52.05 billion — 48 percent of the total. A further 133 appeals valued between Rs.100 million and Rs.1 billion account for Rs.46.59 billion, or 43 percent.
Between 2011 and April 24, 2026, hearings had begun on 611 registered appeals without determinations being issued, tying up Rs.107.2 billion.
“Even though the hearing of appeals has been completed, there are 146 ‘Reserved Cases’ up to December 31, 2025, where the final determination has not been given,” the Auditor General noted, putting the disputed tax in those cases at Rs.34.1 billion. The audit described the commission’s prolonged inaction at the final stage of the process as a failure to achieve the expected performance level.
Appointments left the commission paralysed
Section 10 of the Tax Appeals Commission Act No. 23 of 2011 requires a determination within 270 days of a hearing commencing, but the audit said the commission has not submitted the amendments needed to make that requirement mandatory.
The report also documents a breakdown in appointments. Chairmen and members serve three-year terms, but some appointees named by the ministry secretary declined their positions and others resigned within two months. Hearing committees that ended on November 3, 2025 were not reinstated until January 26, 2026 — a chairman vacancy of nearly three months during which the Auditor General said the appeal process was “completely paralysed”.
The cost was immediate. With the previous appeal body’s term ending on August 31, 2025 and replacements not appointed in time, hearings scheduled for 120 companies between September 1 and 23, 2025 — involving Rs.31.62 billion — were delayed. Another 26 appeals from 13 companies, worth Rs.1.86 billion, were referred to the commission during the inactive period.
Efforts to digitise the commission have also stalled. Despite Rs.2.5 million allocated in 2025 and Rs.2 million in 2026 for a database system, the audit found the software still incomplete as at May 20, 2026.
Source: Daily Mirror.
