President Anura Kumara Dissanayake met top officials of the Department of Inland Revenue on Monday to discuss broadening the tax net, maximising compliance and recovering outstanding tax arrears, the President’s Media Division said.
Discussions focused on enhancing the IRD’s institutional capacity, including restructuring and digitalisation, the President’s Media Division said in a statement. Talks also covered the rollout of the national e-invoicing system and related legal provisions. The President instructed officials to ensure the project is completed within the stipulated timeframe.
Finance and Planning Deputy Minister Dr. Anil Jayantha Fernando, Economic Development Deputy Minister Nishantha Jayaweera, Secretary to the President Dr. Nandika Sanath Kumanayake and IRD Commissioner General R.P.H. Fernando were among those present, the Daily FT reported.
The meeting comes as Sri Lanka’s tax revenue continues a record run under the IMF Extended Fund Facility programme. Tax collection has nearly doubled in the last three years. The government’s Fiscal Strategy Statement for 2026 targets total revenue above 15% of GDP — a level not seen in over 15 years — with tax revenue projected to have reached approximately USD 16.8 billion by the end of 2025.
Since the 2022 economic collapse, structural shifts have included a significantly lowered tax-free threshold and progressive personal rates of 6–36% introduced in 2023, which roughly tripled the registered taxpayer base in a year. Mandatory electronic filing covers most individuals as of 2025/26, with senior citizens granted a manual-filing reprieve from April 2025.
The Inland Revenue (Amendment) Act of 2026 has extended withholding tax to independent service providers including social-media specialists, brand ambassadors, therapists and event photographers, capturing the gig economy. The VAT rate was raised to 18% and the Simplified VAT (SVAT) system was repealed in October 2025. The digital-services VAT was postponed for a third time to July 2026.
The IRD reported Rs. 600 billion in Q1 2026 tax revenue, keeping it on pace with the IMF target endorsed at the Spring Meetings.
