IRD records highest-ever revenue, surpasses 2025 target

• Improved performance attributed to reduced wastage, better governance and rising taxpayer trust
• Tax-to-GDP ratio has risen to 15.4% and is projected to reach 16% by year-end
• All three major revenue collecting agencies (IRD, Sri Lanka Customs and Excise Department) have exceeded their annual targets
• Govt.’s medium-term goal of raising tax-to-GDP ratio to 20% achievable if public confidence in fiscal governance rises further

By Shannine Daniel

The Inland Revenue Department (IRD) has generated additional tax revenue of Rs. 50 billion, surpassing its 2025 revenue target of Rs. 2,195 billion, and recording the highest revenue performance in its recent history. 

According to Finance and Planning Deputy Minister Dr. Anil Jayantha Fernando, minimising wastage and enhancing taxpayer trust and confidence in the government, were the main reasons the IRD was able to surpass its revenue targets.

He noted that tax-eligible citizens are more willing to pay taxes when they see their contributions being used efficiently and responsibly for national development.

He made these comments at a ceremony held yesterday at the IRD headquarters to present appointment letters to 100 newly recruited Assistant Commissioners.

Moreover, as reported in yesterday’s Daily FT, the Deputy Minister also said that tax revenue is expected to rise to 16 percent of GDP by the end of this year, adding that this reflects a sharp turnaround driven by record tax collections and renewed public trust and confidence in the management of state finances.

He also said the tax-to-GDP ratio has already risen to 15.4 percent and is projected to reach 16 percent by year-end, as all three major revenue-collecting agencies—the IRD, Sri Lanka Customs and the Excise Department—have exceeded their annual targets.

Moreover, the Deputy Minister said the government’s longer-term goal of raising the ratio to 20 percent is achievable, as long as public confidence in fiscal governance continues to rise. 

He also highlighted the link between higher tax revenue and lower corruption, pointing out that Sri Lanka’s tax-to-GDP ratio had once fallen to around 10 percent, due to weak governance and misuse of public funds. 

Furthermore, the Deputy Minister said new recruitments and the inclusion of women in the workforce are essential to further increasing revenue. Even though the percentage of women in the country is higher than that of men, women’s contribution within the labour force remains 30% lower than that of men, he noted.

As reported by the Daily Mirror last month, the IRD surpassed the Rs. 2 trillion mark and recorded Rs. 2,002,241 millionas of November 17. 

According to an official statement issued by the IRD on November 18, the revenue collected showed an increase of Rs. 60,079 million compared to the total revenue recorded in 2024, which stood at Rs. 1,942,162 million.