Justiceface
Justiceface
Jun 04, 2026
Sri Lanka

Sri Lanka Enacts Inland Revenue Amendment Act

The Speaker of Parliament, Dr. Jagath Wickramaratne, has officially certified the Inland Revenue (Amendment) Act No. 11 of 2026, bringing significant reforms to Sri Lanka's tax system. The Act, which amends the Inland Revenue Act No. 24 of 2017, was passed by Parliament on May 19, 2026, and aims to modernize tax administration procedures, enhance compliance, and strengthen anti-money laundering measures.

Key Provisions of the Amendment

The Inland Revenue (Amendment) Act introduces several notable changes:

  • Mandatory Use of Taxpayer Identification Numbers (TINs): Taxpayers are now required to use TIN certificates for certain significant financial transactions, ensuring better tracking and compliance.
  • Revisions to Income Calculation: The Act provides clearer guidelines on income calculations, aiming to reduce ambiguities and improve accuracy in tax assessments.
  • Clarification of Tax Exemptions: Specific projects and businesses now have more defined criteria for tax exemptions, promoting transparency and fairness.
  • Enhanced Information Disclosure: The scope for disclosing tax-related information to relevant authorities has been expanded, bolstering efforts against tax evasion and money laundering.

Implications for Taxpayers and Businesses

These reforms are expected to streamline tax processes, making it easier for taxpayers to comply with regulations. Businesses, particularly those involved in significant financial transactions, must ensure they adhere to the new TIN requirements. The clarified provisions on income calculation and tax exemptions will aid in reducing disputes and fostering a more transparent tax environment.

Government's Commitment to Economic Reform

The enactment of this amendment underscores the government's dedication to economic reform and fiscal responsibility. By enhancing tax compliance and enforcement, Sri Lanka aims to increase revenue collection, which is crucial for funding public services and infrastructure projects.

As the Inland Revenue (Amendment) Act No. 11 of 2026 comes into force, taxpayers and businesses are encouraged to familiarize themselves with the new provisions to ensure full compliance and to take advantage of any applicable benefits.