Balancing the Books: Call for Tax Affordability in SL's 2026 Budget 📈

• The core challenge to tax compliance is now affordability, not just willingness, as the combined weight of taxes (Income Tax, VAT, SSCL, etc.) undercuts the basic livelihood of honest citizens. • Amid surging living costs, a middle-income earner (e.g., Rs. 300,000/month entrepreneur) may contribute 35–40% of income through direct and indirect taxes, leading to quiet frustration and potential shift to the informal sector. • The Budget 2026 must restore the balance between citizens' willingness to pay (moral) and their ability to afford compliance (economic). • It is recommended that the IRD evolves from collector to guardian of fairness by: • Introducing a dynamic Affordability Index to review tax impact amid inflation. • Simplifying rules and low-cost regimes for SMEs, freelancers, and small businesses. • Using data analytics and intelligence to strengthen monitoring and identify leakages, avoiding new tax burdens on households. • The ultimate goal is to rebuild trust and make paying taxes realistic and manageable, ensuring compliance becomes a choice, not a struggle.