TIN mandatory to open all bank accounts in Sri Lanka

The Cabinet of Ministers in Sri Lanka has approved amendments to the Inland Revenue Act No. 24 of 2017, making it mandatory to provide a Taxpayer Identification Number (TIN) when opening any type of bank account.

This move aims to improve tax compliance and transparency in the financial system. Alongside this requirement, a new self-declaration system will be introduced for local depositors who earn less than Rs. 1.8 million per year. These individuals will be exempted from paying withholding tax on interest earned from bank deposits.

The Inland Revenue (Amendment) Act No. 2 of 2025, which came into effect on April 1, 2025, had raised the withholding tax rate on interest income from 5% to 10%. This change affected even those with annual incomes below Rs. 1.8 million, causing concern among low-income earners and depositors.

To address these concerns, the government now proposes that those earning below the tax-free threshold be allowed to submit a self-declaration confirming their income status. This will help ensure they are not unfairly taxed on their bank interest.

The proposal was submitted by President Anura Kumara Dissanayake in his role as the Minister of Finance, Policy Planning and Economic Development. The Cabinet has given its approval to proceed with amending the Inland Revenue Act accordingly.

Once implemented, all new bank account holders must submit their TIN, and those with low incomes can avoid paying withholding tax on interest through the new self-declaration process.