The Department of Inland Revenue and the Excise Department have signed a memorandum of understanding to share intelligence and run parallel investigations against tax evasion and money laundering, the Finance Ministry said on Wednesday.
The agreement was signed at the Ministry of Finance, Planning and Economic Development under the Deputy Secretary to the Treasury, A. N. Hapugala. Inland Revenue Commissioner General Rukdevi Fernando and Excise Commissioner General M. B. N. A. Premaratne signed for their departments, NewsFirst reported.
The legal change that sits behind it
The timing is not incidental. EconomyNext reported the ministry’s statement, which ties the MoU to a change in the law that took effect earlier this year:
“In parallel with Sri Lanka’s third mutual evaluation against money laundering, terrorist financing, and proliferation financing, offenses relating to tax evasion.. and offenses falling under the Excise Ordinance have been designated as ‘Unlawful Activities’ related to money laundering with effect from August 4, 2026, via the Prevention of Money Laundering (Amendment) Act.”
In other words, tax evasion and excise offences are now predicate offences for money laundering. An under-declared liquor consignment or a falsified turnover figure is no longer only a revenue matter; it can found a laundering case. The MoU builds the machinery to act on that.
Sri Lanka’s third mutual evaluation is live. The Central Bank Governor said this month that international evaluators had arrived for a two-week on-site assessment and that the test now is effectiveness rather than legislation. An intelligence-sharing agreement between two revenue agencies is the kind of operational evidence that assessment looks for.
The gap it is meant to close
EconomyNext’s account describes the problem in blunt terms: the two bodies operated as isolated entities with incompatible record-keeping and could not cross-verify transactional, production and tax filings in real time.
That left an exploitable seam. A manufacturer could report low turnover to Inland Revenue for its direct tax assessment while under-reporting production volumes or duty liabilities to Excise — each department seeing one half of a contradiction and neither able to see both. EconomyNext attributes to analysts the assessment that this uncoordinated oversight weakened compliance enforcement and eroded the tax-to-GDP ratio.
The government expects the pact to expand audits, minimise illicit financial flows, streamline collection and help meet revenue targets.
The two filings cover different halves
Neither outlet carries the whole story. NewsFirst names the signatories and the venue but omits the 4 August legal change entirely, so its readers get a routine inter-agency handshake. EconomyNext explains the legal trigger and the enforcement gap but names none of the officials who signed. Read alone, either account is incomplete.
Not reported
Neither filing gives a start date for the sharing mechanism, says whether it requires new IT integration between the two departments, or quantifies the revenue leakage it is meant to recover. Neither says whether the MoU covers historical filings or applies only prospectively, and neither carries a figure for how many parallel investigations are expected.
