Tax laws tighten

The Department of Inland Revenue has decided to file criminal charges under penal laws against individuals and institutions that deliberately evade their income tax obligations. The department emphasizes that the latest Inland Revenue Amendment Act No. 11 of 2026 grants full powers to the Commissioner General of Inland Revenue to take these legal steps.

It is stated that lawsuits can be filed based on factors such as failure to register for income tax purposes, not filing income tax returns as required, and not submitting annual statements related to withholding tax and advance personal income tax. However, the department has decided to use these strict legal measures as a last resort and plans to implement several preliminary legal steps before resorting to them.

Accordingly, before taking legal action against any party, a special notification will be officially issued, informing them of the matter, and a 30-day grace period will be granted to fulfill the relevant tax obligations. If steps are not taken to fulfill the relevant requirements within that stipulated period, it will be considered an illegal offense, and the Department of Inland Revenue will proceed to file charges before the Magistrate's Court.

Legal provisions exist to impose a fine not exceeding 400,000 rupees, imprisonment for a period not exceeding 6 months, or both penalties on an individual or institution found guilty in court of such charges. However, the Department of Inland Revenue further points out that this new program is being implemented not to punish cooperative taxpayers, but solely to target those who deliberately commit tax fraud.