IRD targets Rs. 2.1 t revenue for 2025

• IRD Deputy Commissioner General B.K.S. Shantha says only 10 m TIN holders at present leaving nearly 7 m eligible adults outside tax net
• Notes TIN now required for financial and legal transactions—opening bank accounts, registration of lands, vehicles and businesses
• Discloses online TIN portal launched to ease registration, but many still unregistered
• States individuals earning under Rs. 1.8 m per year exempt from withholding tax, but fail to register or claim benefits
• Acknowledges Rs. 60 b annual revenue lost due to tax concessions
• Asserts concessions for those earning under Rs. 1.8 m
• False declarations punishable under the IRD Act; honesty strongly urged

IRD Deputy Commissioner General B.K.S. Shantha

The Inland Revenue Department (IRD) is grappling with a critical shortfall in taxpayer inclusion, even as it chases a hefty revenue target of Rs. 2,195 billion for 2025. 

Despite issuing Taxpayer Identification Numbers (TINs) to around 10 million individuals, IRD officials estimate that only 1.7 to 1.8 million of them are adults over 18 years old, leaving nearly 7 million eligible taxpayers outside the formal tax net.

Speaking at a media briefing, IRD Deputy Commissioner General B.K.S. Shantha acknowledged that a registration gap remains, despite the legal requirement introduced in May 2023 mandating all individuals aged 18 and over to obtain a TIN. 

“We have made progress but there is still a long way to go. These missing millions of citizens who are eligible taxpayers need to be brought into the financial mainstream,” he said.

 He said bringing them into the tax net is crucial not only for compliance, but for long-term fiscal sustainability.

In 2023, the Government made TIN registration a legal requirement, with the intention of integrating the TIN into a broad range of financial and legal transactions—from bank deposits and credit card issuances to land and vehicle registrations. 



To streamline access, the IRD launched an online portal for TIN applications, allowing citizens to register without visiting IRD offices in person.

However, the IRD continues to grapple with the structural challenge of low-income earners who, while legally obligated to register, often fall below the tax threshold and remain disconnected from the formal system. These concessions include exemptions from withholding tax (WHT) on interest income, which eligible individuals can claim by submitting a self-declaration form to their bank.

On 1 April, the IRD doubled the WHT from 5% to 10% on interest income. 

“The IRD foregoes around Rs. 60 billion in potential revenue annually due to tax concessions extended to individuals earning less than Rs. 1.8 million per year,” he said responding to a question. 

The Deputy Commissioner General said although the form is available through both the IRD website and banks, many low-income earners remain unaware or hesitant to engage with the formal tax process—particularly those without existing TINs. 

In response, the IRD has instructed financial institutions to accept self-declarations even from those without TINs during the current month, with the Department set to process the information and assign TINs by the following month.

“We are trying to ensure no one is excluded from the system simply due to lack of documentation. Once banks send us the self-declared information, we will issue a TIN and notify the respective financial institution,” Shantha said.

He cautioned, however, that individuals submitting false information on their self-declaration forms would be subject to penalties under the IRD Act. “This is not a technicality. Providing incorrect information is a punishable offence, and we urge people to be honest,” he added.

The registration drive is part of a broader Government strategy to widen the tax base and improve public revenue collection. With the country still navigating the aftermath of its 2022 economic crisis and under ongoing International Monetary Fund(IMF) oversight, fiscal consolidation remains a top priority for policymakers.

The Deputy Commissioner General insisted that to reach set targets, everyone must participate—registered or not, taxed or exempt. “It is about building a culture of compliance,” he added.