By The Pulseline News Desk
The government has acknowledged growing pressure from Sri Lanka’s Pay-As-You-Earn (PAYE) tax regime, with Secretary to the President Nandika Sanath Kumanayake calling for immediate measures to ease the burden on taxpayers.
Addressing the 21st Annual General Conference of the Association of Inland Revenue Commissioners in Colombo, Kumanayake has said the prevailing situation required swift corrective action, stressing that reforms could no longer be delayed.
His remarks come amid increasing pressure on salaried workers and other taxpayers as the Government seeks to strengthen domestic revenue mobilisation and maintain fiscal stability following the country’s economic crisis.
Kumanayake has stressed that urgent reforms were necessary to provide greater relief to taxpayers, while ensuring that revenue collection remained effective and sustainable.
The call signals a growing recognition within the Government that strengthening state revenue should not come at the expense of placing excessive pressure on individuals whose income is already subject to taxation at source.
At the same time, Kumanayake has emphasised that Sri Lanka’s Inland Revenue Department must be strengthened and modernised to operate at standards comparable with revenue administrations in developed countries.
Such reforms, he has indicated, should focus not only on revenue collection but also on improving the efficiency and effectiveness of the tax administration.
The Inland Revenue Department has assumed an increasingly important role in the Government’s post-crisis fiscal strategy, as authorities seek to broaden the tax base, improve compliance and increase domestic revenue while reducing dependence on borrowing.
The challenge, however, is to strike a balance between raising sufficient revenue to meet the country’s fiscal needs and ensuring that the tax system does not place an excessive burden on compliant taxpayers.
The conference had brought together senior officials involved in the country’s tax administration, including Deputy Minister of Economic Development Nishantha Jayaweera and Inland Revenue Commissioner General R.P.H. Fernando.
Kumanayake’s intervention places taxpayer relief alongside institutional strengthening as key issues for Sri Lanka’s next phase of tax reform — suggesting that improving the revenue system will require not only collecting more, but also making the system more equitable, efficient and responsive to taxpayers.
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