By: Staff Writer
November 06, Colombo (LNW): The International Chamber of Commerce Sri Lanka (ICCSL) and the Rakita Keerthisena Management Trust (RKMT) have unveiled a forward-looking set of proposals for Budget 2026, calling for a smarter, technology-driven and fairer tax regime to strengthen Sri Lanka’s revenue base without burdening honest taxpayers.
In what they describe as “a blueprint for smarter revenue mobilisation,” the proposals urge policymakers to replace outdated systems with digital tools that promote transparency, simplicity and trust the cornerstones of a modern tax culture.
Rewarding Digital Transformation
The first proposal introduces a two-year tax credit of up to 25% for companies, especially small and medium enterprises (SMEs), investing in e-invoicing, ERP systems, and certified accounting software and cybersecurity tools. The initiative seeks to accelerate digital adoption and improve tax accuracy through real-time reporting and digital audits.
“Every rupee spent on digital compliance is an investment in national integrity,” RKMT emphasised, noting that this incentive would help reduce manual processes and bridge the trust gap between taxpayers and administrators.
Simplified Tax for the Service Economy
Acknowledging the rapid rise of Sri Lanka’s freelance, IT, consulting and creative sectors, RKMT has proposed a Simplified Service Economy Tax Framework to make compliance easier and less intimidating.
Under the proposal, individuals or small firms earning below Rs. 20 million a year could voluntarily register and pay a flat presumptive tax rate of 3–5% on gross receipts. Automatic tax withholding through banks and digital payment platforms would further streamline the process.
This simplified model is expected to widen the tax base, reduce enforcement costs, and level the playing field between formal and informal businesses while recognising the growing importance of digital professionals to the national economy.
Transparency through Integration
The third proposal focuses on transforming tax administration via an Integrated Taxpayer Record Tracking Dashboard a unified, digital interface that provides real-time visibility of a taxpayer’s registration, filings, payments, audits and refunds.
By connecting with national databases, the system aims to eliminate duplication, improve accuracy, and cut through the bureaucracy that frustrates taxpayers. “Transparency is not only about accountability; it’s about restoring trust,” the proposal notes.
Beyond Technical Reforms
The RKMT stressed that these measures represent more than administrative fixes they signal a cultural shift toward voluntary compliance through clarity, not coercion.
ICCSL confirmed that the International Chamber of Commerce (ICC) in Paris has pledged its support to assist Sri Lanka’s Government in implementing these digitalisation efforts.
As Sri Lanka continues its fiscal recovery, RKMT urges the Ministry of Finance and the Inland Revenue Department to adopt a long-term approach focused on trust, efficiency and inclusion.
“Sri Lanka’s next economic leap will not come from more taxes it will come from better taxation,” RKMT concluded. “We stand ready to support a 2026 Budget that is fair, forward-looking, and empowering for every honest taxpayer.”
