Sri Lanka’s recent initiative to register every adult for income tax is a mistaken and inefficient action.  As someone who served in the Inland Revenue Department, I feel this approach undermines fairness, practicality, and the real purposes of a strong tax system.

Sri Lanka’s recent initiative to register every adult for income tax is misguided and inefficient.  As someone who served in the Inland Revenue Department, I feel this approach undermines fairness, practicality, and the factual purposes of a strong tax system.

Every year, Sri Lanka witnesses the collection of over a billion rupees in Zakat, yet there remains a concerning prevalence of poverty within the Muslim community. This paradox presents an opportunity for deep reflection, especially for a community celebrated for its entrepreneurial spirit and generosity.

A recent expose, “Keeping Trading Activity out of VAT: A Correction of Bureaucratic Slip-Up,” reveals a long-standing fiscal blunder: local trading—simple buying and selling—was never meant to be taxed under VAT, yet it slipped in due to bureaucratic oversight. The original laws were clear: ordinary trading should have been exempt from regulation.

we focus on a key idea: every taxpayer should receive a clear explanation for any tax assessment, not just a number, but also the reasons behind it. Section 135 of the Inland Revenue Act helps ensure fairness by requiring tax officials to be transparent, support their decisions with credible evidence, and adhere to the law. Now that tax evasion is treated as a criminal offense, officials must meet a higher standard of proof, which provides honest taxpayers with more protection. Courts have often rejected assessments that lack proper explanations, thereby upholding citizens’ rights against unfair decisions. These legal safeguards are more than just technical details; they help build public trust and make sure taxation is fair and accountable.

We focus on your right to know not just what you owe, but why. Section 135 of the Inland Revenue Act calls for transparency. Tax officials cannot override your self-assessed returns without good reason. Every action must be supported by clear evidence and follow legal procedures. Now that tax evasion is a criminal offense, officials must prove any wrongdoing, while honest taxpayers have more protection. Courts have often rejected assessments that lack clear justification, supporting fairness and citizen rights. These safeguards protect you from unfair treatment and help build trust in the tax system.

Taxation is the backbone of a functioning society—but it should never cross the line into oppression. In “Rule of Law in Taxation: Rights before Revenue,” I emphasize that the State’s power to tax is not a blank check; it must be exercised with respect for the fundamental rights of every taxpayer. Article 148 of the Constitution makes this clear: no tax can be imposed without parliamentary approval, anchoring taxation in the principles of democracy and fairness. When tax officials sidestep these protections or neglect to reveal the legal grounds for their actions, it’s more than an error—it’s a breach of justice that makes such acts unlawful and erodes public trust.

Sri Lanka’s tax incentives, like Colombo Port City’s holidays, risk irrelevance under OECD’s 15% global minimum tax (Pillar Two). Large MNCs’ “top-up taxes” now flow to parent countries (e.g., UK/India), not Sri Lanka.

Sri Lanka’s tax system faces critical challenges: 1) Massive revenue leaks ($413M/year per Tax Justice Network) from corporate tax evasion and offshore wealth;

Sri Lanka faces dual crises in environmental governance and tax policy inconsistency. The recent Diyasaru Park controversy—where a musical event damaged this critical wetland habitat—highlights systemic neglect of biodiversity protection, despite Colombo’s RAMSAR designation.