SL Property Tax Reform Urged: Digital Valuation Needed by 2027 IMF Deadline 📈

• A Verité Research study warns that Sri Lanka’s current Property Tax system yields negligible revenue, raising less than 0.1% of GDP in 2021-22, and cannot support the new tax planned by 2027 under the IMF EFF. • Core Problem: The valuation system is outdated. Only about 120,000 properties (3.5% of the 3.5 million on record) received new annual valuations in 2022-23, implying an average property is revalued once every three decades. • Compliance Issue: The Colombo Municipal Council estimates that only about 20,000 of roughly 110,000 commercial properties regularly pay property tax. • Recommendation: Replace manual, site-inspection valuations with digital mass-appraisal techniques, specifically Points-Based Valuation (PBV), which uses aerial imagery and GIS to create a fair, low-cost, and enforceable tax base. • Local Governance: Local councils rely on Treasury grants for about 80% of funding. The Government's 20% cut to recurrent grants from 2024 is seen as an incentive to urgently adopt systems like PBV to build local revenue capacity.