IMF holds talks with RARMB on revenue reforms

A special discussion between the Revenue Administration Reform and Modernisation Bureau (RARMB), which operates under the direct supervision of the Presidential Secretariat, with the objective of modernising Sri Lanka’s public revenue system and the International Monetary Fund (IMF) was held recently at the Presidential Secretariat, under the chairmanship of President’s Secretary Dr. Nandika Sanath Kumanayake.

The discussion reviewed the reform process implemented over the past year, under Sri Lanka’s Medium-Term Revenue Strategy (MTRS), covering the country’s tax system, customs procedures, excise administration and the overall public revenue framework.

In this regard, the IMF delegation also held separate discussions with the senior officials of the Inland Revenue Department, Finance Ministry, Sri Lanka Customs and Excise Department.

The IMF representatives paid particular attention to the plans for the digital transformation projects, accelerating data integration, human resource and leadership development programmes and sustainable strategies to broaden the tax base. During the discussions, the RARMB was recognised as a ‘reform hub with a strong governance framework’.

The IMF also agreed to continue providing technical assistance and advisory support for the reform programme being implemented in relation to Sri Lanka Customs, the Inland Revenue Department and Excise Department.

The RARMB, established in early 2025, under the leadership of President Anura Kumara Dissanayake, with the Cabinet approval, aims to modernise public revenue collection, improve the efficiency of tax administration, implement legal and institutional reforms and provide integrated management of the Inland Revenue Department, Excise Department and Sri Lanka Customs.

As part of the Inland Revenue Department’s reform programme, its branches have been reorganised into Medium Corporate, Metro and Regional Offices, under a structured restructuring process. As a result, tax compliance has increased from 40-45 percent to 70-75 percent.

In addition, following several decades without major legislative reform, a new draft bill to amend the Customs Ordinance has been prepared and submitted to the Legal Draftsman’s Department. Further measures, including simplifying the tariff structure, introducing paperless processes and improving facilitation for exporters, are also scheduled for implementation.

Meanwhile, under the Excise Department reform programme, work is already under way to modernise the department’s operations through the introduction of a new Excise Management System.

An integrated coordination mechanism has also been established between Sri Lanka Customs and the Inland Revenue Department, under the RARMB. This mechanism is intended to facilitate data sharing, integrated risk management, joint audits and verification of tax compliance by the importers through a unified system.

The discussion was attended by an IMF delegation led by Andrew Killer of the IMF’s Fiscal Affairs Department, Revenue Administration Project Manager Cindy Negus, IMF Resident Tax Adviser to Sri Lanka’s Inland Revenue Department Greg, Canadian Senior Adviser Bob Hamilton and the senior officials of the RARMB.