Is tax burden or responsibility - IV

A preliminary policy outline to strengthen tax compliance and revenue sustainability in Sri Lanka

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Since the introduction of mandatory tax registration for those earning over Rs. 100,000 per month, tax file numbers have grown significantly, from 437,547, in 2022, to 1,002,029 by the end of 2023.

This is part of the government's broader effort to increase state revenue as a percentage of GDP and stabilise the economy. However, according to another source, as of November 2023, Sri Lanka had approximately 500,196 registered individual taxpayers, marking a significant increase from 204,467 earlier that year. A spokesman had revealed that as of 2025 the number of active tax files as one million though. Given the country's population of around 22 million, this equates to about 2.3% of the total population. Assuming a workforce of approximately nine million, the tax file coverage among the working population is roughly 5.6%.

This coverage is considerably lower than regional and global averages. In the Asia-Pacific region, the average tax-to-GDP ratio was 19.3% in 2022, while the OECD average stood at 34.0%. Although direct comparisons of taxpayer registration rates are limited, the low tax-to-GDP ratio in Sri Lanka suggests a narrower tax base, compared to these regions.