IRD Surpasses Revenue Targets | Government Eyes Tax Relief

COLOMBO (News 1st); The Inland Revenue Department (IRD) is currently exceeding all revenue collection targets, according to Presidential Secretary Dr. Nandika Sanath Kumanayake, who says the improved performance could help create space for future tax relief measures.

Speaking at a ceremony held in Colombo to mark the 52nd Annual General Meeting of the Staff Officers' Association of the Inland Revenue Department, Dr. Kumanayake said the Department is performing strongly and continues to record revenue collections above expected targets.

Dr. Kumanayake acknowledged concerns among both public and private sector employees regarding Pay-As-You-Earn (PAYE) taxation, noting that many view the tax as a deduction from income that could otherwise be used for personal and family welfare.

However, he stressed that if the government is to provide relief to public servants and other taxpayers, revenue collection must first be strengthened through broader tax compliance and an expanded tax base.

According to the Presidential Secretary, increasing tax compliance and widening the tax net would provide the government with greater flexibility to reduce tax burdens that directly affect ordinary citizens and middle-income earners.

Dr. Kumanayake also outlined measures being taken to improve the efficiency of the Inland Revenue Department, emphasizing the importance of institutional reform and modernization.

He revealed that plans are underway to establish a dedicated unit within the Presidential Secretariat to monitor and support reforms, efficiency improvements and innovation across state revenue-collecting institutions.

A key area identified for improvement was digitalization. Dr. Kumanayake said the Inland Revenue Department has not yet achieved the level of digital transformation required and that accelerating digitalization would simplify procedures, improve efficiency and provide greater convenience for taxpayers.

He noted that enhanced digital systems would not only streamline operations within the Department but also strengthen the government's ability to collect taxes more effectively.

The Presidential Secretary said the government's reform agenda is being implemented through consultation and cooperation with trade unions, departmental officials and senior administrators rather than through top-down directives.

He explained that action plans have been developed based on the experience and expertise of officers working within the system, allowing reforms to be introduced in a gradual and practical manner.

Dr. Kumanayake also highlighted the importance of strengthening domestic institutions at a time when international organizations, including the International Monetary Fund and the World Bank, are closely observing Sri Lanka's fiscal performance and public sector reforms.

He noted that past proposals relating to revenue administration reform had generated considerable debate and stressed the importance of improving existing institutions to ensure they meet international standards while maintaining public confidence.

According to the Presidential Secretary, a more efficient and modern Inland Revenue Department would not only strengthen government finances but also create opportunities to provide meaningful tax relief to citizens, particularly middle-income groups.

He called on IRD officials to continue supporting modernization efforts, saying improved efficiency, stronger tax compliance and higher revenue collection would help position Sri Lanka alongside the world's most effective revenue administration systems while reducing the need for external pressure on domestic tax policy.