• Sri Lanka's IRD collected 55% of defaulted taxes outside the appeals process by June 2024 and exceeded its tax target, collecting Rs. 902 billion against a target of Rs. 826 billion. Judicial reforms are being made to expedite the collection of Rs. 878 billion under appeal.

Sri Lanka's Inland Revenue Department (IRD) has successfully collected 55% of the defaulted taxes outside the appeals process by the end of June 2024. Out of the Rs. 1,066 billion in outstanding taxes as of the end of 2023, Rs. 878 billion are currently under various stages of the appeals process, leaving Rs. 188 billion in arrears outside of it. The IRD managed to collect Rs. 104 billion from these arrears within the first half of 2024. To expedite the collection of taxes under appeal, the Treasury is implementing judicial reforms, emphasizing that Sri Lanka's democratic framework allows citizens the right to appeal tax assessments if they have legitimate grievances.

Despite these ongoing reforms and challenges, the IRD overachieved its tax collection target for the second consecutive quarter. In the first half of 2024, it collected Rs. 902 billion, exceeding the target of Rs. 826 billion. The Ministry of Finance highlighted that while enhancing the efficiency of the appeals process is crucial, it remains vital to respect due process and uphold the system of checks and balances inherent in a democratic system.

IRD collects 55% defaulted taxes | The Morning