📈 Revenue Agencies Unite to Combat Tax Evasion & Under-Invoicing

Sri Lanka Customs and the Inland Revenue Department (IRD) signed a landmark MoU on January 13, 2026, to launch joint investigations into import under-valuation and related tax leakages. • Strategic Collaboration: The agreement enables joint audits of declarations made by importers, targeting businesses that use third parties to evade tax liabilities. This initiative is coordinated by the Revenue Administration Reform and Modernisation Office. • Performance Milestones (2025): • Sri Lanka Customs: Achieved record revenue of over Rs. 2,415 Bn (surpassing the Rs. 2,115 Bn target by ~Rs. 300 Bn). • Inland Revenue Department: Collected a historic Rs. 2,203 Bn, exceeding its annual target by Rs. 33 Bn. • Addressing Structural Gaps: The move follows IMF Governance Diagnostic warnings regarding fragmented revenue institutions. The joint mechanism aims to reduce "siloed" operations that previously created opportunities for corruption and rent-seeking in customs valuation and tax assessments. • Modernization Goals: While digitization (e.g., ASYCUDA) has improved transparency, the government aims to further phase out manual processes and strengthen data-sharing to secure national fiscal targets.