FINANCIAL CHRONICLE – According to data from Sri Lanka’s Finance Ministry, the revenue collected by the country’s three main tax agencies has exceeded expectations as of June 8, 2026, showing a growth of over 50% compared to the same timeframe last year.
The government has set a tax revenue target of 4,910 billion rupees for the current year, which is 2.8% lower than the record revenue of 5,449.4 billion rupees achieved last year.
As reported by FINANCIAL CHRONICLE, the Inland Revenue Department has exceeded its target by 46.3%, generating 1,112.4 billion rupees by early June 2026, while Customs has reported earnings of 1,189.4 billion rupees, reflecting a 53.9% increase from the previous year.
Deputy Economic Minister Nishantha Jayaweera commented during a media briefing in Colombo that typically, revenue figures tend to be higher in the latter half of the year compared to the first half.
The Excise Department has also surpassed its year-to-date revenue target by 48.6% compared to last year, according to the data.
By June 8, the country had already achieved 50% of its revenue target for the year.
This remarkable increase in tax compliance and revenue collection in Sri Lanka is attributed to a robust, enforcement-based overhaul of the government’s fiscal systems.
Under significant pressure to meet stringent structural benchmarks set by the International Monetary Fund (IMF), the Inland Revenue Department transitioned from a passive auditing approach to a more active enforcement strategy.
A key factor in this transformation has been the strict enforcement of the Taxpayer Identification Number (TIN) requirement, which is now mandatory for various essential transactions, including opening bank accounts, registering vehicles or land, and applying for credit cards.
This comprehensive approach to expanding the tax base was further strengthened by the enactment of the Inland Revenue (Amendment), which expanded Withholding Tax (WHT) requirements to include 29 new categories of independent service professionals.
In addition to these structural changes, the government has implemented robust compliance measures alongside legislative actions, offering some relief incentives to encourage tax adherence.
By combining targeted incentives for compliance with stringent penalties for non-compliance, along with a significantly reduced Value Added Tax (VAT) registration threshold, the government is effectively addressing widespread tax evasion, leading to the unprecedented revenue growth observed across the island’s three main tax collection agencies. (Colombo/June 18/2026)
