President right on reduction in registered tax files

The president claims that there were 1.5 million income tax files by the end of 2019 and that the income tax files dropped to 400,000 by the end of 2021. The president makes these claims in the context of attributing the reduction in tax files from 2019 to 2021 to the tax revisions made in 2020.

To evaluate this claim, FactCheck.lk consulted the Annual Performance Reports of the Inland Revenue Department (APRIRD).

The APRIRD shows that there was a total of 1,505,552, and 409,814 income tax files, by the end of December 2019 and 2021 respectively, when adding the number of both corporate and personal income taxpayers (see Exhibit 1). The numbers given by the president are aligned with the reports, which indicate a reduction of tax files by 73%, as claimed by the president.
Therefore, we classify the president’s statement as TRUE. 

Additional note: The numbers in Exhibit 1 shows that Sri Lanka’s individual tax files including PAYE registrations, which had 1,430,988 tax files in 2019, captured only a limited subset of those likely to be liable for income tax. Two indications of this are that in 2019, the individual tax files accounted for only about 17% of the employed population and just 18% of the total number of registered vehicles as of that year.

*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.

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