- SL’s first survey on the Taxpayer Charter reveals critical gaps in public awareness
The International Chamber of Commerce Sri Lanka (ICCSL) has launched the country’s first survey to assess public awareness of the Taxpayer Charter, a document outlining taxpayers’ rights and obligations introduced by the Inland Revenue Department (IRD) in 2023.
Led by researcher and ICCSL Committee for Research, Knowledge Mobilisation, and Taxation Chairperson Dr. Nadee Dissanayake and University of Sri Jayewardenepura (USJ) Faculty of Humanities and Social Sciences Head of Information and Communication Technology Prof. Damayanthi Bamunusinghe, the survey provides key insights aimed at strengthening voluntary tax compliance and promoting a citizen-focused approach to tax administration.
This interview with ICCSL Chairman Shanil Fernando along with Dr. Dissanayake and Prof. Bamunusinghe explores the significance of this groundbreaking initiative and its potential impact on Sri Lanka’s tax compliance culture.
In this discussion, Fernando, Dr. Dissanayake, and Prof. Bamunusinghe share their perspectives on the importance of taxpayer awareness, the insights revealed by the survey, and how these findings can help foster a culture of voluntary compliance in Sri Lanka. They also discuss the challenges and opportunities in creating a more transparent, citizen-centric tax administration.
Following are excerpts:
Why did the ICCSL choose to focus on the Taxpayer Charter for this study?
Fernando: The Taxpayer Charter is more than a policy; it’s a bridge between the Government and citizens. At the ICCSL, we realised that without public awareness of their rights and obligations, even the best tax reforms cannot achieve meaningful compliance.
By focusing on this, we aim to empower taxpayers, strengthen trust, and ultimately enhance revenue collection and economic governance. Informed citizens are not just compliant, they become active partners in shaping a fair and transparent tax system.
How was the survey conducted and why does it matter economically?
Prof. Bamunusinghe: We carried out a nationwide survey, engaging both individual taxpayers and businesses, using a mix of digital and face-to-face methods to ensure broad representation.
Economically, this study is crucial because informed taxpayers are more likely to comply voluntarily, which reduces compliance costs, minimises disputes, and eases the administrative burden on the IRD. Ultimately, this strengthens fiscal capacity, allowing more resources to flow into development priorities without relying solely on enforcement.
What were the key findings of the study?
Prof. Bamunusinghe: While many taxpayers know about the charter, most focus on rights rather than obligations, showing a clear gap between awareness and understanding.
Practical use is hindered by technical language and inconsistent guidance, and mistrust over data privacy limits engagement. Frontline officers play a crucial role, but inconsistencies in support can undermine confidence. Addressing these gaps is essential to make the charter effective.
How can these findings be translated into practical solutions?
Dr. Dissanayake: The survey offers a clear roadmap for transforming insights into action. Our findings highlight the urgent need for targeted tax education programmes, particularly for youth and small-to-medium enterprises, who demonstrated the lowest levels of awareness. Simplifying content and making it relatable can significantly enhance understanding and voluntary compliance.
Digital platforms, such as the IRD’s e-Services portal, should be leveraged to provide intuitive, user-friendly guidance on taxpayer rights and obligations. Beyond technology, we recommend establishing a dedicated taxpayer engagement unit within the IRD to monitor awareness, provide continuous support, and actively promote the charter’s implementation.
Ultimately, practical solutions should focus on making compliance easier, transparent, and service-oriented. When taxpayers feel informed, supported, and fairly treated, compliance becomes a natural choice rather than a forced obligation, strengthening trust, reducing disputes, and improving overall fiscal governance.
How does increasing taxpayer awareness benefit the private sector and the broader economy?
Fernando: Raising taxpayer awareness creates a more transparent and predictable tax environment, which is critical for business planning and long-term investment decisions. When businesses and individuals clearly understand their rights, obligations, and processes, they gain confidence to operate fully within the formal economy.
This predictability reduces hidden costs and uncertainties associated with compliance, encouraging more Small and Medium-sized Enterprises (SMEs) to formalise their operations. A wider, more engaged tax base can be achieved without raising tax rates, which strengthens fiscal stability while promoting a fairer competitive landscape.
Ultimately, informed taxpayers contribute to a healthier economy, enhancing public revenue, supporting sustainable development, and fostering trust between the private sector and Government institutions.
Were there any unexpected findings that should alert policymakers?
Prof. Bamunusinghe: One of the most striking findings was the perception gap between taxpayers and the IRD. A significant number of respondents still view tax compliance primarily as a burden rather than a civic responsibility, often influenced by past negative experiences or unclear guidance. This points to an underlying trust deficit that policymakers cannot ignore.
Addressing this requires more than procedural reforms; it calls for a human-centred approach to tax administration. Policymakers should focus on improving taxpayer services, establishing robust grievance redressal mechanisms, and maintaining proactive, transparent communication.
Additionally, integrating feedback loops where taxpayers can contribute ideas or report challenges can foster a sense of ownership and partnership. By enhancing both transparency and engagement, authorities can shift perceptions, strengthen voluntary compliance, and create a more cooperative, citizen-oriented tax ecosystem benefiting both the Government and the broader economy.
Based on the survey findings, what policy recommendations would you submit to the Ministry of Finance and policymakers to better engage the broader business community as taxpayers?
Fernando: The survey highlights clear gaps in awareness, understanding, and trust that must be addressed through targeted, practical policies. First, public communication must strike a balance between taxpayer rights and obligations, especially for SMEs and informal sector actors, so that businesses understand not just what they are entitled to, but what is expected of them as well.
Second, educational strategies should be tailored to different segments: simplified visual guides for the general public, sector-specific toolkits for SMEs, and technical materials for accountants and intermediaries. Third, reinforcing trust through transparent data management and privacy safeguards is critical; businesses need to feel confident that their information is secure.
Frontline officers also play a pivotal role; equipping them with training in the charter’s principles and empathetic communication can turn every service encounter into a compliance-building opportunity.
Finally, institutionalising monitoring and evaluation through dedicated units tracking awareness, engagement, and feedback will ensure that policies evolve with the needs of taxpayers. Together, these measures can create a more informed, confident, and compliant business community, ultimately supporting a stronger and fairer economy.
What are the essential follow-up actions to ensure these findings translate into policy impact?
Dr. Dissanayake: Institutionalising these findings is key to turning insights into lasting policy impact. We recommend establishing a multi-stakeholder advisory panel that includes representatives from the Ministry of Finance, the IRD, the private sector, and civil society. This panel would not only oversee the rollout of the Taxpayer Charter but also ensure that its implementation remains responsive to public needs.
Regular public feedback loops through annual taxpayer satisfaction surveys, focus group discussions, and community dialogues are critical for keeping policies grounded in real-world experiences. Integrating the charter into national financial literacy and civic education programmes can foster long-term behavioural change, particularly among youth and small business owners.
Furthermore, leveraging digital platforms to provide interactive tools, tutorials, and real-time support can make compliance simpler and more transparent. By combining institutional oversight, continuous engagement, education, and technology, policymakers can create a resilient, citizen-centric tax environment where compliance is seen as a shared responsibility rather than a burden.
Final thoughts
The ICCSL’s survey makes it clear that tax compliance isn’t just about rules; it’s about trust, transparency, and shared responsibility.
By highlighting gaps in awareness and perception, the study offers a practical roadmap for policymakers, businesses, and citizens to work together towards a fairer, more accountable tax system. As Sri Lanka strengthens its domestic revenue base, informed and empowered taxpayers will be the driving force behind a sustainable, resilient, and equitable economy.