Sri Lanka’s economic recovery in 2026 continues to be undermined by entrenched public sector corruption, with new official data exposing deep procedural failures across key State institutions. The latest Progress Report of the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) for 2025 paints a sobering picture of systemic weaknesses that directly affect investor confidence, public revenue, and service delivery.
The report reveals that CIABOC received 8,409 complaints during 2025, a volume that underscores the scale of public distrust in State institutions. Yet structural limitations remain evident. More than 3,600 complaints were dismissed at the preliminary stage due to insufficient evidence or jurisdictional constraints, highlighting gaps in both reporting mechanisms and investigative capacity.
Enforcement outcomes remain modest when weighed against the scale of alleged wrongdoing. While the commission carried out 130 raids and arrested 84 suspects, operational effectiveness was inconsistent, with nearly half of the raids yielding limited results. Only 115 new cases were filed during the year, and by the end of 2025, over 300 cases remained pending across the court system. This backlog continues to fuel perceptions of delay and impunity.
CIABOC Chairman Justice Neil Iddawela has acknowledged these challenges, announcing a strategic shift under the Anti-Corruption Act No. 9 of 2023. The commission is transitioning from a passive, complaint-driven model to a more proactive investigative authority, with a stronger focus on complex financial crimes such as money laundering and unexplained wealth.
However, watchdog groups argue that legislative reform alone will not deliver results. Transparency International Sri Lanka (TISL) has repeatedly warned that weak enforcement, limited political will, and institutional inertia continue to undermine anti-corruption efforts. It has flagged the absence of a centralised beneficial ownership registry as a critical loophole, limiting the State’s ability to trace illicit financial flows and verify asset declarations of public officials.
The economic consequences are far-reaching. Corruption in revenue agencies, local government bodies, and law enforcement erodes tax collection, distorts public spending, and raises the cost of doing business. The CIABOC report documents arrests across the police force, judiciary, local authorities, and the Inland Revenue Department institutions central to economic governance and rule of law.
High-profile arrests, including former ministers, Members of Parliament, and heads of State-owned enterprises, signal an effort to pursue accountability at senior levels. Yet analysts caution that without timely prosecutions and convictions, these actions risk being viewed as symbolic rather than transformative.
The investigation into the Department of Motor Traffic (DMT), where millions of rupees in alleged illicit collections were uncovered, has become emblematic of everyday corruption affecting citizens and businesses alike. Delays, bribes, and opaque systems raise transaction costs and discourage formal economic activity.
As Sri Lanka seeks stability and growth in 2026, restoring trust in public institutions remains as critical as fiscal reform. Without credible enforcement and transparency, corruption will continue to function as an invisible tax one the economy can ill afford.
