Colombo Mayor Vraie Cally Balthazaar broke down the Colombo Municipal Council’s Rs.1.03 billion Inland Revenue liability on Thursday, saying the bill is composed of Rs.483 million in outstanding Value Added Tax for 2016-2020 plus Rs.551 million in penalties.
In a statement shared on social media, the mayor said the liabilities had arisen from late payment charges and from input-tax claims being rejected after the required information was not submitted on time. The arrears, she said, predate the current administration of the council.
“We will continue discussions with the Inland Revenue Department regarding the settlement of these liabilities that arose due to delays prior to the new government assuming responsibility for the CMC,” Balthazaar said. She added that all taxes due from the third quarter of 2025 onwards have been paid on time, without further penalties.
The clarification follows the Inland Revenue Department’s May 26 case at the Colombo Magistrate’s Court to recover Rs.1,034 million from the CMC, which had been reported as a single aggregate figure. Today’s breakdown matches that total — Rs.483m plus Rs.551m equals Rs.1.034bn — and reframes more than half of the bill as penalty rather than principal, which the mayor signalled is the most contested portion. The dispute lands as the government tightens revenue administration under its IMF-backed fiscal programme, and as the CMC itself navigates a politically split chamber where three opposition councillors have crossed over as independents.
