📊 Govt. Launches “Tax Power 2026” Drive to Boost Voluntary Compliance

The Government will launch a nationwide campaign next month, titled “Tax Power 2026” (Badu Shakthi 2026), to shift negative public attitudes toward taxation and build a culture of voluntary compliance. • Overall Strategy: Spearheaded by the Presidential Secretariat's Revenue Administration, Reform and Modernisation Unit, the core program runs from July 6–10. It unites the Inland Revenue Department (IRD), Sri Lanka Customs, and the Excise Department to conduct public, youth, and media awareness campaigns. • Tax Base Expansion: Since Tax Identification Numbers (TIN) became mandatory on January 1, 2024, the IRD has issued nearly 13 million TINs. Personal income tax files have risen to over 1.2 million to date. • Revenue Targets & VAT: The IRD has already exceeded its six-month collection target by about 59%. Officials state that the decision to keep the VAT threshold at Rs. 60 million (instead of reducing it to Rs. 36 million) will not impact the annual revenue collection target. • Key Challenges: Tax evasion remains a significant issue. The IRD estimates that roughly 40% of all taxable transactions in Sri Lanka are cash-based and untraceable, though a precise rupee value for the evaded tax is unavailable.