📈 IRD Launches Phase II of Digital Invoicing System

The Inland Revenue Department (IRD) has officially commenced Phase II of Sri Lanka’s Digital Invoicing System, expanding the platform to wider Value Added Tax (VAT)-registered businesses following a successful initial rollout, according to the Ministry of Finance. • Overall Objectives: Part of the 2026 Budget agenda to modernise tax administration through digitalisation. The system creates electronic audit trails to improve VAT compliance, curb fraud, and accelerate revenue collection while reducing administrative burdens. • Phase I Success: Launched in October 2025 with over 340 voluntary companies, including apparel & textiles exporters and tea producers. These sectors are already seeing faster VAT refund processing through system-based reconciliation. • Phase II Expansion: Focuses on voluntary onboarding of large manufacturers and retail chains. Integration guidance and technical documentation have already been shared with 27 export firms and 170 VAT-registered manufacturers. • Technical Integration: Businesses using Enterprise Resource Planning (ERP) systems can integrate directly with the Revenue Administration Management Information System (RAMIS) via web APIs for real-time, automated data exchange. • Next Steps: Phase III is scheduled to begin by the end of 2026, introducing mandatory Point of Sale (POS) systems for all VAT-registered entities, supported by upcoming amendments to the VAT Act.