Tax collection a key focus in interim budget

In an effort to reduce the tax revenue bleed and capture a larger proportion of the working population in the system, Wickremesinghe, in his capacity as the Finance Minister said those above 18 years of age are urged to register with the Inland Revenue.

Further, to increase tax collection, the interim budget 2022 announced the increase of Value Added Tax (VAT) from 12 percent to 15 percent from 1 September 2022.

The Inland Revenue Department (IRD) has a very high proportion of defaulted taxes and unpaid penalties which are only expanding every year.

Sri Lanka at present has complex tax legislation and poor tax administration that has resulted in the direct to indirect tax ratio being 20:80, which ideally should be the opposite.