📈 IRD and Excise Department Sign MoU to Combat Tax Evasion and Illicit Financial Flows

• Key Agreement: Sri Lanka’s Inland Revenue Department (IRD) and Excise Department (ED) signed a Memorandum of Understanding (MoU) to establish real-time intelligence sharing and joint parallel financial investigations aimed at preventing tax evasion and money laundering. • Regulatory Context: Effective August 4, 2026, offenses under the Excise Ordinance and direct tax evasion were classified as "Unlawful Activities" related to money laundering under the Prevention of Money Laundering (Amendment) Act. This aligns with Sri Lanka's third mutual evaluation on anti-money laundering and counter-terrorist financing. • Impact on Revenue Collection: • Resolves historical institutional silos, incompatible record-keeping, and automated data gaps that allowed non-compliant businesses to underreport turnover to the IRD while underreporting production volumes to the ED. • Aims to optimize state resources, expand tax compliance audits, curb black-market trade in excisable goods, and improve the state's tax-to-GDP ratio to hit national revenue collection targets.