With revenue targets climbing and pressure on public finances mounting, Sri Lanka is moving to expand its tax base by simplifying returns and easing compliance for taxpayers.
Sri Lanka’s Finance Ministry and the Inland Revenue Department have begun fresh discussions to widen the national tax net while reducing red tape and simplifying the tax return filing process to boost government revenue, the Finance Ministry said in a statement. The meeting was chaired by Deputy Minister of Economic Development Nishantha Jayaweera and attended by Rukdevi Fernando and other senior officials.
“It directed to take necessary measures to increase the compliance of the people to pay their taxes on their own and to expedite the awareness of taxpayers,” the Finance Ministry said. “The Deputy Minister instructed to minimize the inconvenience faced by taxpayers in filing tax returns and to simplify tax returns as much as possible. He also directed the Inland Revenue Department to urgently submit a practical program to meet the annual revenue targets.”
Officials also reviewed plans to meet current revenue needs and the expected contribution from tax reforms. Sri Lanka has already revised its 2025 tax revenue target upward due to stronger income from income tax and levies on goods and services, driven largely by vehicle import taxes, according to the latest budget data.
The government initially targeted total tax revenue of 4,590 billion rupees for 2025. This has now been raised by 2.9 percent to 4,725 billion rupees. The income tax target was increased by 3.7 percent to 1,210 billion rupees, while the target for goods and services levies was raised by 6.5 percent to 2,953 billion rupees.
