Urgent steps must be taken to address the heavy burden the Pay-As-You-Earn (PAYE) tax places on the public, Secretary to the President Dr Nandika Sanath Kumanayake said in Colombo, adding that the prevailing situation must be rectified without delay.
He was speaking at the 21st Annual General Conference of the Association of Inland Revenue Commissioners, Ada Derana reported. Kumanayake also said Sri Lanka’s Inland Revenue Department should be developed to a standard comparable with revenue administrations in developed countries.
The conference was attended by Deputy Minister of Economic Development Nishantha Jayaweera and Inland Revenue Commissioner General R.P.H. Fernando.
A firmer line than four weeks ago
The remarks are notable less for their content than for their emphasis. Kumanayake addressed the same subject on 6 August, at the Staff Officers’ Association of the Inland Revenue Department, and the sequencing he set out then was the opposite of urgency. He acknowledged the unease over PAYE among public and private sector employees, but cautioned that relief could not come first: revenue collection had to be strengthened through broader compliance and a wider tax base before the government could reduce burdens on middle-income earners and public servants.
On Wednesday the conditionality was absent from the account of his remarks. The burden itself, rather than the compliance work that would fund relief from it, was the thing described as requiring action without delay.
Whether that reflects a policy shift or simply a different audience is not clear from the report, and Ada Derana did not indicate that Kumanayake announced any specific measure, threshold change or timeline. Sri Lanka’s current PAYE structure was tightened as part of the IMF-programme revenue effort, and the thresholds have been a persistent source of public complaint among salaried taxpayers.
There is fiscal room in the collection figures, at least in the direction of travel. The Inland Revenue Department has been running ahead of its targets this year — it had reached 61 per cent of its annual revenue target by mid-August — and the August conference had already been framed around what stronger performance might make possible.
Not yet reported
Ada Derana gave no indication of what steps are under consideration, who would take them, or when. It did not report whether the Treasury or the Finance Ministry has been asked to review PAYE thresholds, nor whether any change would be held for the 2027 budget. Neither the Deputy Minister’s nor the Commissioner General’s remarks to the conference were reported.
