Editorial
Taxpayer friendly Inland Revenue Dept. urgent need
Many compliant taxpayers have expressed their frustration with the Inland Revenue Department (IRD) for insisting that the Return of Income for the year of assessment 2023/2024 be filed as an electronic return (e-return). It is perplexing why such a requirement is being enforced in a country such as ours where computer skills are woefully lacking. In many other countries the taxpayer is entitled to submit a return either electronically or by hard copy (paper). The choice should be with the taxpayer and not the IRD. In some countries, any tax refunds to individuals are inevitably delayed for those who submit manual returns compared to those who submit e-returns. This incentivises the taxpayer to embrace technology. But here, it is forced down the taxpayer’s throat.
A fundamental principle must be that tax compliance should not result in the taxpayer having to incur additional cost or physical/mental stress in fulfilling their civic obligation of paying their income tax. Many senior citizens are not computer savvy enough to navigate through complex returns or do not have access to a laptop or other paraphernalia needed to upload supporting documents. Therefore, many individual taxpayers who struggle to complete their returns by themselves are now forced to engage the services of a professional tax consultant or accountant to submit their returns. This is an additional cost that taxpayers should not be burdened with. We understand that the IRD reluctantly accepted hard copy (paper) returns from some senior citizen who insisted they could not submit an e-return.
The IRD should concentrate on getting more people liable to pay tax to do so, thus widening the tax net instead of penalizing those who settle their dues but may delay submitting their return for the above mentioned reasons. The Inland Revenue Act provides penalties for failure to file a return on time and for criminal proceedings as well as issuing default assessments where necessary. It has often been said, with good reason, that the IRD bullies people who pay their taxes and submit their returns and does little to tackle blatant evasion which is rampant.
We have been told that taxpayers who receive interest income from fixed deposits are required to enter a significant amount of information into the e-return, which is tedious and unnecessary, particularly if the taxpayer can submit or upload a certificate from the deposit taker confirming the interest received and the advance income tax deducted at source. As in other countries, it is up to the IRD and the deposit taking institutions to devise a compliant digital platform that will enable such information to be uploaded to the IRD’s Random Access Management Information System (RAMIS).
IRD invested hugely in setting up RAMIS but was unable to utilize it effectively over many years. The banks and other deposit, too, have not played their part in this because many banks are not issuing certificates to their customers that disclose all the information required by the IRD. Time was when a blanket 15 percent withholding tax (WHT) was imposed at source on interest and dividend income with no further liability thereafter. This undoubtedly imposed hardship on those not liable for income tax in obtaining notoriously slow refunds from the department and was an advantage to high income earners. Nevertheless, like PAYE (Pay As You Earn) tax, it was an easy collection method for IRD.
After the November deadline for submitting the annual return for 2023/24 passed, the IRD issued a circular extending the deadline for submitting tax returns for that year until December 7. The circular cites the difficulties taxpayers encountered last week due to the inclement weather that prevailed in the country. No mention has been made of the RAMIS system being more or less inaccessible in the days leading to the deadline, as it could not deal with too many taxpayers trying to access the system at the same time! The circular also mentions that IRD officials will offer special support until December 6, 2024, for those who visit the department for technical assistance to submit their return online. This is most welcome.
According to currently available information, about a million taxpayers are registered with the IRD. This seems insufficient, considering that more than eight million are employed, and the income threshold for paying income tax is Rs. 100,000 monthly. It will be interesting to know as to how many of the million have submitted their tax returns by the due date or will do so in the next few days and weeks. Undoubtedly, people need to be tax-compliant, but it is also necessary for the IRD to make the process easy for taxpayers to make payments and submit their annual income tax returns.
The IRD currently does not accept cheques for settling tax obligations. A taxpayer must make a direct bank transfer or settle his/her dues through a banker’s pay order. This imposes an unfair added cost on tax payers as well as the inconvenience of having to visit the bank for this purpose. This requirement clearly is intended to ensure that tax cheques do not bounce. But the department is empowered to impose penalties on those whose cheques are dishonoured. Why impose additional burdens on taxpayers accustomed to meet their obligations by writing a cheque instead of visiting a bank and paying for the issue of a banker’s pay order?
The bottom line is that the IRD must be more taxpayer friendly than it is at present. Printing platitudes like “Thank you for paying your taxes” on its stationary is just not enough. Honest taxpayers with files on record must not be bullied, as is often done at present, and burdens like the compulsory online payment requirement now imposed as well as the ‘no cheques’ rule must done away with. Also, the department must take note of the resentment of people who pay taxes long seeing those who do not getting away Scott free.
Editorial
Kaduwela land grab and statist spectres
A private company has complained to the police, alleging that Kaduwela Mayor Ranjan Jayalal and NPP MP Asitha Niroshana forcibly took over a block of land belonging to it in Athurugiriya for a Metro bus stand. Lawyers representing the company have told the media that the police have not acted on their complaint due to political pressure. The NPP politicians remain defiant, insisting that the new bus stand will not be shifted under any circumstances.
Sri Lanka politicians take leave of their senses when power goes to their heads. During previous governments, there were widespread allegations that some politicians got their supporters to encroach on privately owned estates in the Colombo suburbs and then demanded money from hapless owners to remove the squatters, while others openly grabbed houses and land with impunity. These allegations have gone uninvestigated. The 2024 regime change was expected to bring such illegal practices to an end. But in 2025, a group of JVP activists, led by a deputy minister, stormed a party office belonging to their rival faction, the Frontline Socialist Party (FSP), in Yakkala, and forcibly occupied it after assaulting and driving away a group of FSP members. They even showed the police a document, claiming that it was a court order vesting the ownership of the building in the JVP, and the police promptly cordoned off the area and set up a checkpoint to ensure the safety of the JVPers. But in April 2026, the Gampaha District Court ordered the JVP to return the office to the FSP.
The alleged land grab in Athurugiriya is different from the previous ones in that it is not intended to benefit any political party or any private individual as such, but it cannot be countenanced on any grounds. There should certainly be a place for the Metro buses to be parked in Kaduwela, but the government must not bulldoze its way through to acquire private property. It should negotiate with the company concerned and explore the possibility of purchasing the land at the prevailing commercial rate or taking it on lease. If the owner is unwilling to sell or lease the property, the government will have to look for an alternative location. There is no other way out. That is the way such disputes should be settled in the civilised world. The police must be made to explain why they have not instituted legal action against the Kaduwela Mayor and the NPP MP.
The government’s efforts to develop the Metro service deserve praise, encouragement and public support. The state-owned bus service has to be revitalised. However, the development of the Metro bus service cannot be cited in extenuation of high-handed actions, such as the alleged land grab.
It is high time the JVP/NPP politicians and their supporters realised that a popular mandate is not tantamount to a carte blanche and they cannot act according to their whims and fancies. The alleged land grab is bound to have an unsettling effect on investors, particularly foreign investors, given the JVP’s original ideological programme, which bore the imprimatur of its founder-leader Rohana Wijeweera, and the continuing influence of the party’s old guard over the present government. The JVP’s early programme called for far-reaching socialist economic measures, including the abolition of private ownership in several sectors and revolutionary land reform. The forcible land takeover in Athurugiriya not only smacks of statism but also conjures up the failed communist spectres of the past.
The government should take cognisance of what the US says, in its 2026 Investment Climate Statements: Sri Lanka, about land tenure here. Noting that Sri Lanka has made important progress since the 2022 economic crisis, the report says the investment environment remains difficult and unpredictable. It is not simply a negative report: it acknowledges political stability under the NPP government, commitment to the IMF programme. However, it makes specific mention of “tenure insecurity” in the context of weaknesses in Sri Lanka’s land sector. The report lists it alongside land scarcity, fragmented land administration, land degradation, encroachment and land disputes. Tenure insecurity generally means that a person or business does not have sufficiently certain, legally enforceable and transferable rights over the land they occupy or use. But it also means vulnerability to illegal occupation, land grabbing, encroachment or other involuntary loss of land. The World Bank’s definition of ‘tenure insecurity’ is noteworthy. It says tenure security involves protection against the involuntary loss of land, and notes that insecurity can arise from disputes within families or communities, or from the actions of governments or private claimants.
The US investment report provides an important reference to the foreign investors assessing Sri Lanka’s investment climate. The JVP-NPP government therefore should not send the wrong message to investors. In this day and age, news travels almost at subatomic speed, reaching millions of people across the globe within seconds. The government would do well to be mindful of the repercussions of its actions.
Editorial
Fuelling discontent and protest
Saturday 3rd October, 2026
Private fuel bowser owners were up in arms, yesterday, claiming that they were incurring huge losses because the Ceylon Petroleum Corporation (CPC) had not increased commissions for fuel distribution. Unless the CPC responded favourably to their demand for a substantial increase in commissions, they would be left with no alternative but to stop fuel distribution completely with immediate effect, they warned, noting that the CPC had promised to announce its final decision yesterday.
The Ceylon Petroleum Private Tanker Owners’ Association (CPPTOA), which is leading the fuel bowser owners’ struggle, said yesterday that it expected their commission to be raised at least to 20%, as the cost of fuel distribution had increased sharply. A meeting between the CPPTOA representatives and the CPC officials was going on at the time of writing.
It defies comprehension why the CPC lets the grass grow under its feet without addressing issues that have the potential to cripple fuel distribution. The CPPTOA had been protesting for weeks, but the CPC ignored fuel distributors’ demand. It may have expected the problem to go away with the passage of time. Everything possible must be done to prevent pumps from running dry at filling stations, causing hardships to the public and adversely impacting the economy.
The CPC should have taken immediate action at the first sign of trouble and invited the CPPTOA to talks instead of waiting until the eleventh hour. Prudence demands that a game of chicken be averted in a crucial sector like petroleum distribution.
Issues that could cripple the petroleum sector are best sorted out at the negotiating table, which is the ideal place for bargaining. We are not in a position to say whether it is fair for the CPPTOA to demand a 20% commission, but the fuel distributors’ grievances should be addressed and the CPC ought to hold talks with them and negotiate solutions as and when issues crop up. Flexibility is a prerequisite for resolving trade union problems. Intransigence and brinkmanship only aggravate such issues, much to the detriment of the country’s interests. If bowser operators stopped distributing fuel for a couple of days, perish the thought, it would take a considerable time to replenish supplies thereafter, and fuel queues would reappear. Disruptions to fuel distribution could have a domino effect on virtually every other sector of the economy.
The fragile economy, which is recovering from an unprecedented crisis, cannot take any more shocks, and the patience of the public is manifestly wearing thin. Petroleum sector trade unions have claimed that the CPC is selling fuel from older stocks at higher prices, while fuel distributors have called upon the government to scrap the loss-recovery levy immediately, arguing that the CPC’s legacy debt has now been fully repaid. These are the issues the Opposition should take up in Parliament instead of making loud noises that signify nothing.
One can only hope that the CPC and the CPPTOA will resolve the commission issue through negotiations, and the CPC will act more responsibly in the future without trying to wish away trade union issues that could cripple the petroleum sector.
Editorial
Colombo Port drug bust: The plot thickens
Friday 2nd October, 2026
An inquiry conducted by the Police Special Investigation Unit (SIU) into some allegations concerning the circumstances that surrounded the 31 August drug detection at the Colombo Port has revealed that there may have been dereliction of duty on the part of Senior Deputy Inspector General of Police (SDIG) Ranmal Kodituwakku and several other officers, according to media reports. The plot thickens.
Acting on information reportedly received from the US Drug Enforcement Administration, the Central Crime Investigation Bureau (CCIB) searched a shipping container, bound for Cameroon, at the Colombo Port, and detected a large quantity of crystal methamphetamine weighing about 471 kg. The intelligence that led to the drug detection had been conveyed to SDIG Kodithuwakku, who was overseeing the CCIB. It was reported that the officers of the CCIB had obtained a search warrant from a Magistrate before opening the container, with the help of some personnel from the Police Narcotics Bureau and Sri Lanka Customs. Now, there is another version of how the drug detection was made.
SIU is reported to have found that both SDIG Kodithuwakku and the Police Narcotics Bureau received information about the drug consignment, on 14 August, but no action was taken immediately. On 22 August, a sub Inspector of the CCIB also received the same information. He subsequently took action and on 31 August, the container was opened in the presence of the Customs officers. The SIU investigators are reported to have found that some officers of the Police Narcotics Bureau were also present at the scene, but the initial detection of the drug consignment was carried out primarily by officers of the CCIB. SIU has recommended that in addition to the internal inquiry a criminal investigation should be conducted, according to media reports. But was the opening of the container strategically delayed, as has been claimed in some quarters? There have been numerous such instances around the world. The SIU investigators therefore ought not to rush to conclusions before establishing whether the delay, if any, formed part of a deliberate investigative strategy.
It has been reported that French Customs found 139 kg of cocaine in a shipping container at Marseille last year but instead of seizing the drug consignment immediately, it resorted to a controlled delivery of the big box to Barcelona, where a stevedore, two recipients and a transporter were arrested.
In 2023, after detecting 240 kg of methamphetamine in a 40-foot-container, Hong Kong Customs arranged for an international controlled delivery to Australia, where the box was bound for, and several arrests were made there. In May 1985, U.S. Customs allowed a drug-laden shipping container arriving at Port Newark to proceed under surveillance in a controlled-delivery operation in order to identify the people who would take delivery of it.
Police investigations have not always inspired public confidence in this country. There have been many instances where they conducted investigations hurriedly and arrived at the wrong conclusions. In 2015, the CID arrested two suspects, including a schoolboy, over the abduction, rape and murder of a little girl in Kotadeniyawa. It was later found that the perpetrator was someone else. Another striking example is the arrest of two former LTTE cadres after the execution-style killing of two policemen in Vavunathivu in 2018. But after the Easter Sunday terror attacks the following year, the CID found that the two policemen had been murdered by the National Thowheed Jamaath, which carried out the 2019 carnage.
So, one can argue that there is nothing inherently implausible about the claim that the opening of the container carrying narcotics at the Colombo Port was postponed in a bid to catch all those responsible for the illegal operation. Only a thorough probe will reveal whether this method was actually adopted in the case of the port drug bust.
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