Historical records, inscriptions and ancient literature provide us with abundant information regarding an organized tax system spanning from the time before Christ up to the introduction of the modern tax system in the country. Inscriptional records from the 3rd century BC provide information regarding the taxes paid for the consumption of water for agricultural purposes and the taxes were collected on behalf of the state by the officials These taxes were mainly in kind and called “Dakapathi” and “Bojakapathi”.
Apart from the mechanism of collection of taxes, the titles of collecting officials, the purpose of collection and for what purposes the collected taxes had been utilized are also mentioned in such inscriptional records. “Kaniya”, “Kannika” and “Athana” of such places where taxes were collected and as international trade flourished from the very ancient times, in Sri Lanka (Even from the time of the arrival of Aryan settlers from India), there were officials collecting taxes at the point of import and export. Thus, during the Anuradhapura period we came across officials “Mahapatuladda” who was responsible for collecting import and export duties at Mahattita (Mannar) where pearl fishing was a main source of foreign exchange. Godawaya the harbour at Hambantota was another point where taxes were collected at the point of import and export.
From the 2nd century BC land tax had been in existence according to inscriptional records. Allocating the collected taxes for specific purposes has been recorded in the ancient inscription. Thus, Carts carrying grain supplies to the city had to pay taxes in kind at the point of entering the city and these collections were directed to the “Mahapola Alms Hall” a dwelling house for the Buddhist clergy. The last kingdom of Sri Lanka ruled from the hill country where the kings had reigned till the entire country came under the rule of the foreign invaders. Robert Knox, landed in the country after a shipwreck in 1660 was captured by the Sinhalese king and was held captive for twenty years till he escaped from the captivity. He fled to England and recording his experience in captivity (Historical Relation of Ceylon), He explains how the taxes were collected three times a year and how the collected taxes were directed to the king’s treasury. According to knox’s record there had been different rates of taxes and taxes paid in kind. Such items included gems, wine, oil, Corn, Honey, wax, cloth, iron tobacco and even elephant teeth.
“Maral” was a tax (Marala Badda) to be paid at the death of a person and for the purpose of collection of this tax, there was a separate official appointed. At the time of the British colonial rule there had been instances where taxes with adverse effect on people were removed for the welfare of the people. In 1882 paddy tax which was in existence was abolished in the Eastern province of Sri Lanka.
The abolition of paddy tax was a step to promote the cultivation of paddy in the province (Government Agents Report - 1882). In 1893 taxes were levied on wheat flour, rice, sugar, tobacco and cotton (Government Agent’s Report 1893, Eastern Province).
There is sufficient evidence to show that tax in some form or other was levied from the dynasty of King Saddatissa in Anuradhapura kingdom to dynasty of King Narendrasinghe in Kandyan Kingdom. During these periods there was a direct relationship between taxation and the service provided by the King to his people. As the king provided the protection to his people he was entitled to a portion of production from the land in return. Also there was an obligation to service as a condition of holding land.
Inland Revenue Department, Sri Lanka,
Chittampalam A. Gardiner Mawatha, Colombo 02.
© 2023, All rights reserved by Inland Revenue Department - Sri Lanka