The Inland Revenue Department (IRD) proudly announced last week that it had collected over Rs. 2 trillion as of 17 November, notably the highest annual revenue in its history. The milestone surpasses the total tax revenue for 2024 with six weeks of the year still remaining, a fact the Government has trumpeted as a sign of fiscal discipline, economic recovery, and improved efficiency. The Government has been quick to market it as a badge of honour and a celebratory moment that affirms its governance narrative.
Yet, beneath the triumphant statistics lies the harder truth that this record has not been achieved through economic expansion, higher productivity, or improved living standards, but rather through unprecedented taxation. It is the people – struggling households, small businesses, and consumers – bearing the brunt of this burden who funded this windfall. Therefore, what is being celebrated as a victory for the State is in effect the sacrifice of the citizens.
The Government’s pride in tax collection would have been easier to digest had it been accompanied by genuine public benefit. But Sri Lankans today are asking an uncomfortable question: what, precisely, have they received in return?
For a country emerging from bankruptcy and clambering towards stability, one might expect that a swelling Treasury would translate into relief for families, better services, lower costs, and restored social welfare. Instead, citizens have been made to face the harsher reality of rising living costs, shrinking disposable incomes, deteriorating public services, and an administration that appears more invested in expanding its political comforts than alleviating the burdens of the people.
After years of being denied the right to purchase a new vehicle, people rushed to make use of the newly restored opportunity. Reportedly, shipments worth over $ 1.2 billion have flooded in. But what greeted the eager buyer was a wall of taxes often amounting to nearly three times the value of the vehicle itself. The IRD’s record revenue owes much to these taxes. But for families who saved for years, who postponed key life decisions in anticipation of this policy reversal, the experience must have felt less like a moment of liberation and more like State-sanctioned fleecing.
If the Government is celebrating, the people certainly are not. For ordinary Sri Lankans, the fundamental question is simple: if they are being taxed at historically high levels, should they not see at least some improvement in their daily lives? Has the cost of living eased? Has healthcare improved? Has the quality of education improved? Has household stress declined? The answers, tragically, are consistently negative.
Despite the overflowing Treasury, the cost of living remains unrelentingly high. Inflation is on the rise. Many households now live in a state of perpetual financial strain, their disposable incomes compressed by heavy taxation – income at one end and goods and services at the other. In addition, healthcare costs continue to soar, and even State hospitals – the backbone of public welfare – are regularly running short of essential medicines. Doctors routinely instruct patients to purchase medicines from private pharmacies, an instruction that is impossible for thousands who can barely afford food. The Government, which loudly pledged during its election campaign to remove VAT on medicines, seems to have conveniently forgotten that promise.
Education is faring no better. VAT on school supplies remains intact, imposing yet another burden on parents as they brace for a new school year. Although the Government openly committed to expanding educational access, it is reportedly preparing to close down hundreds of ‘small’ schools. The grand promise of using proceeds from the sale of State-owned luxury vehicles to build new schools has faded from memory, replaced by the far more stunning announcement of procuring 1,775 new pickup trucks for politicians at a cost exceeding Rs. 50 billion. The Rs. 12.5 billion allocated for the purpose in Budget 2026 is apparently just the leasing cost for one year.
What makes double cabs a more urgent national priority than classrooms or hospitals or cheaper food? Why has the narrative around Government vehicles shifted so dramatically from harping about excess vehicles that need to be disposed of, to suddenly declaring a shortage of vehicles requiring billions in new spending? If the previous regime managed with these supposedly excess vehicles, then either the former administration was more frugal than credited, or the current administration has been misleading the public all along.
The contradictions extend far beyond vehicles and tax collections. The State insists that it is now fiscally disciplined, administratively transparent, and free of corruption. Yet this narrative becomes hollow against some basic questions. If thieves have been chased out, if corruption and irregularities have been halted, if State corporations now enjoy proper management, if no new large-scale projects have been started, if there is no drought, and if hydropower plants are functioning at near full capacity due to abundant rain, then why, despite all these supposedly favourable conditions, are prices the same or rising?
Citizens are being told the system has been cleaned, but the outcomes look suspiciously unchanged – or worse. If corruption was the reason for high prices in the past, and corruption has now been eliminated, why are prices still rising? If inefficiency was the excuse for CEB losses under previous governments, and inefficiency has now been supposedly eliminated, why is the CEB once again running at a loss – this time despite South Asia’s highest electricity tariffs? The Government owes the country an explanation and not a celebratory pat on its own back.
The IRD, in its statement, acknowledged taxpayers’ contributions, congratulating them for fulfilling their obligations. But such polite acknowledgments ring hollow when not accompanied by tangible returns. What citizens rightly expect is a reduction in the heavy tax burden, improved access to medicines, better-quality education, lowered fuel and electricity prices, and efficiently functioning public utilities. What they fear is that the additional revenue will be used to prop up State-owned white elephants such as SriLankan Airlines, as done in the past.
These anxieties are magnified by the President’s unsettling dismissal of Sri Lanka’s debt crisis. During his Budget 2026 speech, Anura Kumara Dissanayake repeatedly challenged the very idea that a crisis exists: “What crisis? Which crisis?” he asked rhetorically. His tone was one of denial, not urgency. What the President’s stance reveals is a narrow economic philosophy; one that equates timely debt repayment with economic success, while ignoring the broader consequences.
It is to be noted that Sri Lanka’s foreign debt restructuring achieved only a minor haircut of less than 10% and compressed the repayment timeline instead of easing it. This means vast sums must be diverted to foreign creditors in coming years, squeezing public spending and limiting the room for investment and development. Yet the Government appears to interpret punctual debt servicing as an indicator of national strength, even as social welfare erodes and domestic industries suffer.
The administration seems to have only one goal: repay debt at all costs. But an economy cannot be run as a debt-repayment machine. A nation cannot progress if growth, innovation, development, and welfare are permanently subordinated to the demands of creditors. This tunnel vision leaves Sri Lanka vulnerable. A single external shock like a global recession, a spike in fuel prices, or a climate disaster could potentially thrust the country back into crisis and revive the spectre of bankruptcy.
Nowhere is the Government’s lack of vision and strategy more painfully visible than in the agriculture sector. Farmers are threatening mass protests as they struggle to sell their produce, access fertiliser, or cover their costs. Instead of confronting these issues head-on, the Government has postponed meaningful solutions to next year, even while spending millions on food imports that include hitherto locally grown staples such as rice, onions, and potatoes. At a time when global food markets are volatile and self-sufficiency is a vital strategic objective, this absence of strategy is concerning.
In the end, the story of Sri Lanka’s “record-breaking revenue” is not a story of triumph. It is a story of disparity; of a Government celebrating fiscal figures while citizens struggle to survive; of promises of reform overshadowed by political indulgence; of a leadership that mistakes debt servicing for economic progress; of a nation taxed to its limits but receiving little in return.
If the State wishes to celebrate its revenue achievement, it must first ensure that citizens feel the benefits of their sacrifices. Until then, the Rs. 2 trillion milestone will not stand as a testament to national recovery, but as a monument to the widening gulf between the Government’s rhetoric and the people’s reality.