Tuesday May 19, 2026
Tuesday May 19, 2026
Tuesday, 19 May 2026 02:17 - - {{hitsCtrl.values.hits}}
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| Opposition Leader Sajith Premadasa |
Opposition Leader Sajith Premadasa yesterday criticised proposed amendments relating to tax enforcement, warning that penalising taxpayers unable to make payments due to legitimate reasons would undermine business confidence and democratic norms.
Speaking after meeting tax and financial experts, Premadasa said there was an attempt to amend laws to criminalise delays in tax payments arising from circumstances such as illness or overseas travel.
“Evading tax payments due to valid reasons cannot be considered a crime,” he said.
The remarks come amid intensified Government efforts to strengthen tax administration and revenue collection under Sri Lanka’s International Monetary Fund (IMF)-supported fiscal reform program, which has placed heavy emphasis on improving tax compliance and broadening the revenue base.
Premadasa argued that excessive punitive measures risked creating uncertainty among entrepreneurs and businesses already operating under difficult economic conditions. “This is against democratic norms,” he said, adding that such measures could push entrepreneurs into a “fear psychosis.”
The criticism centres on proposed Clause 34 of the Inland Revenue (Amendment) Bill 2026, which seeks to introduce a new Section 185A to the Inland Revenue Act, No. 24 of 2017.
Under the proposed provision, failure to file annual statements, income tax returns, tax returns, failure to register with the Commissioner General of Inland Revenue, or failure to appear before the Department when summoned could become criminal offences punishable by fines of up to Rs. 400,000 or imprisonment of up to six months, or both.
The proposed Bill also contains controversial provisions relating to tax recovery procedures. Under Clause 31(4), unpaid taxes could effectively be treated as Court-imposed fines through a Magistrate’s Court process initiated by the Commissioner General of Inland Revenue.
Critics argue that the mechanism represents a significant departure from the current Inland Revenue Act, which treats unpaid taxes as civil liabilities recoverable through civil proceedings rather than criminal sanctions.
Several clauses of the Bill, including Clauses 4, 9, and 28, have already been withdrawn following legal challenges and a Cabinet decision to amend the legislation at Committee Stage.
