⚖️ Tax Experts Warn IRD’s Growing Policy Role Risks Sri Lanka’s Investment Climate

Private sector tax professionals at the CA Sri Lanka 5th Annual Economic and Tax Symposium issued sharp criticisms against the Inland Revenue Department (IRD), warning of growing taxpayer uncertainty and poor administration despite record revenue collections. • Policy Encroachment & Secrecy: Experts claim tax policymaking is increasingly being delegated to the IRD, blurring the line between Parliamentary intent and administration. Legal interpretations remain opaque, with calls to publish anonymized private rulings to prevent inconsistent treatment across taxpayers. • Tax Base Concerns: While the IRD achieved record collections in 2025 and is on track to exceed 2026 targets, critics argue higher revenues stem from over-taxing existing taxpayers rather than widening the tax base. This erodes local saving, expenditure, and investment capabilities. • Administrative Bottlenecks: Practitioners highlighted inconsistent technical views among officials, lengthy refund delays, and an over-cautious culture fueling unnecessary litigation. There are urgent calls to upgrade the technical capacity of IRD staff. • Digitalization & Solutions: To improve compliance, tech leaders proposed a taxpayer-centric online platform, open APIs to integrate payment systems with existing point-of-sale infrastructure, and leveraging AI to streamline tax services.