We are pleased to announce that Gajma & Co. was recently featured in an in-depth interview published by TheMorning.lk, one of Sri Lanka’s leading news publications. In this wide-ranging conversation, Senior Partner N.R. Gajendran shared his views on the state of taxation in Sri Lanka, the country’s post-crisis economic challenges, and the need for reform in fiscal policy.
This media feature not only reflects Mr. Gajendran’s longstanding reputation as a leading tax consultant in Sri Lanka, but also highlights Gajma’s continued role in shaping public discourse on national tax strategy, economic equity, and regulatory reform.
Taxation, Legitimacy, and the Principle of Fairness
In the interview, Mr. Gajendran addressed the growing disconnect between Sri Lanka’s citizens and its tax system. He argued that the current taxation framework characterized by high rates and limited relief has become increasingly unaffordable, especially for middle- and lower-income groups. According to him, when taxation ignores the principle of capacity to pay, it risks losing public legitimacy altogether.
He observed that people are now questioning not only the fairness of the system but also the value they receive in return a fundamental issue that undermines compliance. He added that taxation in a democratic state must go beyond revenue generation; it must also enable citizens to meet their basic needs and contribute to a functioning social infrastructure. The current framework, however, appears to burden households while failing to instill confidence in public spending.
This aligns with Gajma’s broader philosophy as a firm offering tax consulting that balances legal compliance with economic feasibility, while championing systems that are grounded in equity and logic.
Reforming the Tax Environment to Attract Investment
Mr. Gajendran also highlighted how the post-crisis tax landscape has become detrimental to business confidence. With both direct and indirect taxes on the rise, companies especially SMEs struggle to operate sustainably, let alone grow. In such an environment, he warned, Sri Lanka risks pushing away both domestic and foreign investors.
He advocated for a shift in policy from mere revenue collection to investment-friendly taxation, calling for mechanisms that reward businesses investing in innovation, sustainability, and workforce development. He pointed out that leading global firms benefit from expenditure-based relief in other jurisdictions a model Sri Lanka should consider adapting to retain and grow capital inflows.
At Gajma, we have long worked with clients on structuring tax-efficient investment strategies whether through incentive mapping, capital expenditure planning, or R&D claims. The insights shared in this interview reflect the same principle we uphold: that well-structured taxation leads to sustainable economic outcomes.
A Call for Systemic Rebalancing and Accountability
One of the interview’s key messages was that Sri Lanka has historically failed to strike the right balance between direct and indirect taxes. The reliance on indirect taxation such as VAT and turnover-based levies has disproportionately affected lower-income groups, especially at a time when wages have stagnated and the rupee has depreciated significantly.
Mr. Gajendran emphasized that while other countries may levy high income taxes, their citizens feel a sense of reciprocity because they see public value being delivered. In Sri Lanka, he noted, trust in government expenditure remains low due to perceived inefficiency and corruption. He urged policymakers to address this trust gap by rebalancing tax instruments and ensuring accountability in public finance management.
As a firm deeply involved in fiscal advisory, policy consulting, and tax compliance, Gajma is committed to contributing to this broader reform conversation. We believe that taxation should not only fund the government it should shape a fairer, more resilient economy.
Read the full interview with N.R. Gajendran here:
