FINANCIAL CHRONICLE – The International Monetary Fund (IMF) recently engaged in a significant dialogue with representatives from Sri Lanka’s State Revenue Administration Reform and Modernization Department (RARMB) at the Presidential Office, as reported in an official statement. This meeting involved a delegation from the IMF’s Fiscal Affairs Department, including Andrew Kille and Cindy Negus, along with Greg, the IMF Resident Tax Advisor for Sri Lanka’s Inland Revenue Department, Canadian senior advisor Bob Hamilton, and key officials from the RARMB.
The discussions focused on various aspects of Sri Lanka’s revenue reforms, specifically emphasizing initiatives related to digital transformation, enhancing data integration, developing human resources and leadership skills, and implementing sustainable strategies to expand the tax base, according to the President’s Media Division (PMD).
The review assessed the progress made over the past year in the context of Sri Lanka’s Medium-Term Revenue Strategy (MTRS), which encompasses the national tax system, customs processes, excise administration, and the overall public revenue framework. The IMF team also conducted separate meetings with senior officials from the Inland Revenue Department, the Ministry of Finance, Sri Lanka Customs, and the Department of Excise.
Moreover, the IMF confirmed its commitment to providing ongoing technical assistance and advisory support for the reform initiatives associated with Sri Lanka Customs, the Inland Revenue Department, and the Department of Excise.
The RARMB, which was established in 2025 during President Anura Kumara Dissanayake’s administration, is focused on modernizing public revenue collection, enhancing the efficiency of tax administration, enacting legal and institutional reforms, and ensuring integrated management across the Inland Revenue Department, Sri Lanka Customs, and the Department of Excise.
As part of the reform efforts within the Inland Revenue Department, the organization has undergone a restructuring process, resulting in the establishment of branches categorized as Medium Corporate, Metro, and Regional Offices. This restructuring has led to an improvement in tax compliance rates, which have risen from 40-45% to 70-75%, as indicated by the PMD.
Additionally, a new draft Bill aimed at amending the Customs Ordinance has been formulated and submitted to the Legal Draftsman’s Department. Plans are also in place to simplify the tariff structure, implement paperless processes, and enhance support for exporters.
In parallel, the reform efforts within the Department of Excise are progressing, with initiatives underway to modernize operations through the introduction of a new Excise Management System.
The PMD further noted that an integrated coordination mechanism has been established between Sri Lanka Customs and the Inland Revenue Department under the RARMB. This mechanism is designed to promote data sharing, integrated risk management, and joint audits, thereby facilitating the verification of tax compliance among importers through a unified system.
