Will Inland Revenue prosecute you for tax mistakes? Things every Sri Lankan needs to know

Colombo, July 19 (Daily Mirror) - The Inland Revenue Department said it will initiate criminal prosecution against individuals and entities who deliberately fail to meet their specified income tax obligations. 

The IRD said the Inland Revenue (Amendment) Act, No. 11 of 2026, which amends the Inland Revenue Act, No. 24 of 2017, came into force on 3rd June 2026 and that it introduces prosecution actions 

for certain compliance failures.

The Department said a taxpayer who fails to comply with statutory requirements may be subject to prosecution proceedings in circumstances including failure to register with the Commissioner General of Inland Revenue, failure to file income tax returns and failure to file annual statements (including Withholding Tax and 

Advance Personal Income Tax [APIT] returns). 

The IRD emphasises that prosecution is a measure of last resort and to ensure 

fairness, a mandatory legal process will be followed before any court proceedings begin.

It said taxpayers will first receive a formal written notice detailing the IRD's intention to prosecute and the taxpayer will be granted a strict period of 30 days from the date of the notice to rectify the non-compliance and fulfill the outstanding requirements. 

If the taxpayer fails to comply within this 30-day window, it will constitute an offence. Upon conviction following a summary trial before a magistrate, the offender faces a fine not exceeding Rs. 400,000, imprisonment for a term not exceeding six months or both, the notice said.

The IRD advised all taxpayers with income tax liabilities to ensure timely compliance with the law to avoid enforcement actions.