Electronic invoicing in Sri Lanka: current status and roadmap to tax digitization

Sri Lanka is moving decisively towards modernizing its tax system through the implementation of electronic invoicing. Although the country does not yet have a fully operational real-time e-invoicing model, initiatives promoted by the government and the Inland Revenue Department (IRD) mark a turning point in the country's tax digitization.

This process is part of the national strategy to achieve Sri Lanka's digital economy goals by 2030, with a strong focus on transparency, collection efficiency, and reducing tax evasion.

The President of Sri Lanka has publicly emphasized the need to strengthen and digitize the tax system as a key pillar of economic growth. In recent meetings with the Inland Revenue Department, the Ministry of Finance, and the Ministry of Digital Economy, it has been reiterated that digitization is essential to:

• minimizing tax irregularities
• simplify the tax system
• improve tax transparency
• expanding the taxpayer base
• facilitate tax compliance for businesses and citizens

In this context, the existing tax management system, known as the Revenue Administration Management Information System (RAMIS), becomes the technological basis on which the new electronic invoicing model will be built.

Evaluation of the electronic invoicing system in Sri Lanka

The Inland Revenue Department has completed a technical assessment to integrate an e-invoicing framework with the RAMIS system. The goal is to enable seamless digital communication between taxpayers' ERP systems and the tax administration.

Following this analysis, the authorities have determined that the implementation of a secure Web API will be the first step in enabling e-invoicing capabilities in the country.

This approach allows for:

• direct connection between business systems and the tax administration
• structured exchange of tax data
• leveraging existing technological infrastructure
• a gradual transition to more advanced models

Phased implementation of e-invoicing in Sri Lanka

The roadmap defined by the government envisages a gradual implementation, designed to minimize the operational impact on businesses and ensure the stability of the system.

The first phase consists of a pilot project involving a small group of taxpayers who have already updated their ERP systems to support integration via API.

During this stage, the following are validated:

• interoperability between ERPs and RAMIS
• the security of data exchange
• operational and technical processes
• the scalability of the system

Once the pilot is complete, the API system will be expanded to include selected companies with export activity, a key sector for the country's economy and particularly relevant from a tax and tax control perspective.

The next phase envisages the adoption of the system by all companies registered for VAT purposes in Sri Lanka. This step will lead to a much wider adoption of electronic invoicing in the B2B environment, strengthening tax control and the traceability of transactions.

The final phase of the project introduces a significant structural change: the mandatory use of electronic invoicing in B2C transactions through the use of point-of-sale (POS) terminals.

This model will enable:

• the recording of transactions in near real time
• a substantial improvement in VAT control
• greater fiscal transparency
• use of a centralized web platform for tax administration