Changing tax culture: One taxpayer at a time

As Sri Lanka continues its economic development, strengthening voluntary compliance remains essential. Taxes are not just a collection mechanism; they are a collective investment in the nation’s future. By helping taxpayers overcome hesitation, rebuilding confidence, and promoting awareness, the Department aims to create a tax system that is trusted, accessible, and sustainable

In a famous experiment, a predatory pike fish was placed in a tank with smaller fish separated by a transparent barrier. At first, the pike tried repeatedly to catch the smaller fish but failed. After many unsuccessful attempts, it stopped trying altogether. Even when the barrier was removed, the pike did not attack; the fish had learned from past experience that effort was futile. One concept that offers valuable insight into this behavior is the “Pike Effect”.

Humans often behave in similar ways. When people face repeated obstacles or frustrations, they may develop hesitation or avoidance, even if conditions improve later. Behaviour is influenced not only by rules or reality but also by past experiences and perceptions.

This learned hesitation is an example of the Pike Effect , and it has direct relevance for tax compliance. Many taxpayers may have previously faced complex registration processes, unclear guidance, or delays in resolving queries or tax refunds. Such experiences can make them hesitant to engage with the system. Some may delay registration, avoid timely filing, or rely on informal advice instead of official channels. Even when processes improve through online filing, better guidance, or faster support, taxpayers may continue to act based on earlier frustrations.

Recognising this helps the Inland Revenue Department understand that improving compliance is not just about laws or technology, it is about building confidence and creating positive experiences. The Inland Revenue Department continues its mission to make tax compliance simple, fair, and trusted.

As the country observes National Tax Day on 2 April 2026, it’s an opportunity to reflect not just on systems and policies, but on how human behaviour influences engagement with taxes. National Tax Day provides a platform to reinforce this message. Beyond awareness campaigns, it allows the Inland Revenue Department to show taxpayers the improvements made, highlight available support, and demonstrate how tax contributions fund schools, hospitals, roads, and social programs. Understanding this connection helps taxpayers see their contributions as part of a shared effort for national development.

Every interaction, whether through taxpayer support services, digital tools, or guidance materials, is an opportunity to build trust and encourage voluntary compliance. Positive first experiences are especially important. For instance, when a new business registers smoothly or a taxpayer receives clear guidance, it reinforces the idea that engaging with the tax system is worthwhile. Over time, repeated positive experiences can reshape behaviour, gradually replacing past hesitation with confidence.

Young citizens play a crucial role. Students, young professionals, and first-time entrepreneurs are the next generation of taxpayers. Introducing them to a system that is transparent, responsive, and supportive helps prevent hesitation from forming. Educational initiatives and clear guidance ensure they understand taxation as part of responsible citizenship rather than as a burden.

Businesses also contribute by complying consistently and seeking guidance proactively. Their actions help strengthen confidence in the system and encourage a culture where voluntary compliance is natural and constructive.

The Pike Effect

The Pike Effect reminds us that trust takes time to rebuild. Improvements to systems and services must be communicated clearly so that taxpayers know changes have occurred. Positive experiences must be repeated before old perceptions fade. At the Inland Revenue Department, efforts to expand taxpayer support services, enhance digital tools, and improve guidance materials aim to remove barriers and build confidence. Monitoring common questions and challenges also allows the department to adapt services continually, ensuring taxpayers feel supported.

As Sri Lanka continues its economic development, strengthening voluntary compliance remains essential. Taxes are not just a collection mechanism; they are a collective investment in the nation’s future. By helping taxpayers overcome hesitation, rebuilding confidence, and promoting awareness, the department aims to create a tax system that is trusted, accessible, and sustainable.

The Pike Effect offers a key lesson: while past difficulties may shape behaviour, consistent positive experiences can reshape it. With every interaction, the Inland Revenue Department can move taxpayers from hesitation to trust, from reluctance to responsible action. National Tax Day reminds us that taxation is a partnership. When the system works with citizens, and citizens engage responsibly, the country benefits. By addressing the human side of compliance, Sri Lanka can foster a tax culture where paying taxes is understood, respected, and willingly practiced supporting progress, fairness, and opportunity for generations to come.