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Proposed amendments to Inland Revenue Bill sparks fear over ...
By The Pulseline News Desk A controversial provision in Sri Lanka’s proposed Inland Revenue (Amendment) Bill 2026 has triggered growing concern among legal experts, tax professionals, and constitutional observers, who warn that the legislation could significantly expand State power by turning administrative tax failures into criminal offences. At the centre of the debate is the proposed Section 185A, a clause critics argue represents more than a technical tax reform. They say it marks a deeper shift in the philosophy of governance – one that risks weakening democratic safeguards in the name of enforcement efficiency. The provision would reportedly allow criminal sanctions, including fines and imprisonment, for failures such as non-registration, failure to file tax returns, failure to submit required statements, or failure to appear before tax authorities when notified. Opponents argue the danger lies not only in the penalties themselves, but in the broad nature of the offence. The central concern is that the proposed law appears to criminalise procedural non-compliance even where there is no fraudulent intent, concealment, deception, or deliberate tax evasion. Legal analysts say that departs from one of the foundational principles of criminal law – that criminal punishment should generally require mens rea, or a guilty state of mind. “This is not a minor drafting amendment,” one constitutional lawyer familiar with the Supreme Court petitions has noted. “It is a philosophical change in how the State relates to citizens.” The controversy has already escalated into constitutional litigation before the Supreme Court under Article 121 of the Constitution. From administrative error to criminal liability Critics argue that in most mature democratic systems, procedural tax failures are treated primarily as civil or administrative matters handled through penalties, interest, negotiated settlements, compliance mechanisms, or rectification procedures. Criminal prosecution, they note, is generally reserved for deliberate fraud, concealment, falsification, money laundering, obstruction, or systematic tax evasion. The distinction, observers say, is critical. Because once procedural mistakes become criminal offences, ordinary citizens and businesses may become vulnerable to coercive enforcement and selective targeting. “A delayed filing can become leverage. An administrative omission can become a criminal file. A technical breach can become a political weap...
Inland Revenue Bill introduces criminal penalties for tax procedural ...
A proposed amendment to the Inland Revenue Act is set to introduce strict criminal penalties for taxpayers who fail to meet key procedural requirements, marking a significant shift in enforcement. ..
Second Reading debate on Inland Revenue (Amendment) Bill in Parliament ...
Accordingly, on May 19, the Second Reading debate on the Inland Revenue (Amendment) Bill is scheduled to be held while on May 20, the Adjournment Debate will be held on the report of the Annual Economic Review of the Central Bank of Sri Lanka for the year 2025, based on a motion moved by the government.
Proposed Tax Bill Signals Harsh Penalties for Non-Compliance
Sri Lanka's latest tax reform initiative is poised to introduce tougher penalties for individuals and businesses that fail to meet their tax obligations, with proposed laws paving the way for criminal prosecution against persistent offenders. The Inland Revenue (Amendment) Bill of 2026 introduces sweeping measures aimed at strengthening enforcement powers and compelling greater taxpayer ...
