By: Staff Writer
September 18, Colombo (LNW): Sri Lanka’s much-hyped Rs. 10 billion Revenue Administration Management Information System (RAMIS), introduced in 2016 to overhaul tax collection, is faltering under severe governance and technological weaknesses, raising concerns over its ability to safeguard billions in state revenue, the World Bank has cautioned.
In its latest Sri Lanka Public Finance Review – Towards a Balanced Fiscal Adjustment, the Bank warned that the Inland Revenue Department’s (IRD) reliance on an underperforming IT backbone is constraining the country’s fiscal reform agenda. RAMIS, developed by a Singaporean firm, was intended to automate core tax functions, from taxpayer registration to compliance monitoring. Yet, nearly a decade later, many of those functions remain unreliable or absent.
“The lack of functionality in RAMIS remains a binding constraint in improving tax administration,” the Bank said, noting that the IRD continues to rely on manual interventions that are resource-intensive, error-prone, and open to inefficiencies.
A critical gap lies in the maturity of the IRD’s IT department. Without strong in-house capacity, the department is heavily dependent on vendors, leaving key functions vulnerable if external support fails. The World Bank flagged weak IT governance, poor vendor management, and inadequate human resources as compounding risks.
RAMIS has yet to deliver essential tools such as fully operational taxpayer portals, automated risk management, or comprehensive data analytics. These shortcomings, the Bank argued, highlight not just technical flaws but broader institutional weaknesses.
While the IRD has laid out an IT Strategic Plan, the World Bank said it falls short of addressing urgent challenges: building a proper governance framework, attracting and retaining skilled IT staff, and developing capacity to manage vendors effectively. “The inability to attract and retain skilled IT staff undermines long-term capability,” the review stressed.
The government has set 2027 as a deadline for the IRD to build internal capacity to manage and run RAMIS independently. But the Bank stressed that this transition will require heavy investment, stronger project management, and political backing. It recommended adopting international governance standards such as COBIT or ISO/IEC 38500, expanding IT staffing, and establishing a data warehouse for better tax analysis.
Despite these structural flaws, IRD has improved efficiency in recent years. Between 2020 and 2023, its cost of collection fell from Rs. 0.86 to Rs. 0.41 for every Rs. 100 collected—well below the global average of Rs. 1. But the Bank warned that such efficiency gains cannot substitute for structural reform. To sustain higher revenue, Sri Lanka must modernise its tax authority through detailed, sequenced, and well-resourced reforms, it said.
The report also pressed for a shift towards risk-based audits and refunds, backed by legislative reform. It urged the government to introduce a new Tax Administration and Procedures Law to replace discretionary practices with transparent, codified rules.
Ultimately, the World Bank’s message is clear: unless Sri Lanka strengthens its IT backbone, governance, and human resources, RAMIS risks becoming a costly, underperforming system that threatens rather than protects the country’s fiscal future.
