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The Tax System in Colombo: A Chaotic Guide for the Slightly Broke

@Hugo Barrett2/8/2026blog
The Tax System in Colombo: A Chaotic Guide for the Slightly Broke

so here's the deal with taxes in colombo-it's like trying to fold a fitted sheet while riding a tuk-tuk. confusing, slightly dangerous, and you'll probably end up swearing. i'm a freelance photographer here, so i've had my fair share of staring at forms that look like they were designed in the '90s by someone who hates joy. the sri lankan tax system is a mix of pay-as-you-earn (paye) for employees, value-added tax (vat) at 15%, and a whole bunch of other acronyms that make you want to cry into your third cup of coffee. if you're self-employed like me, you gotta file twice a year and pray the internet doesn't cut out mid-upload. the inland revenue department (ird) is the place to go, but honestly, good luck getting a straight answer from anyone there. it's like asking a cat to explain quantum physics.

a large red building with a clock on the top of it

the numbers game



rent in colombo? let's just say my one-bedroom in bambalapitiya costs more than my dignity. average rent for a decent place is around lkr 50,000-80,000 a month. utilities? another lkr 10,000 if you're lucky. and don't even get me started on the cost of living-a meal at a local joint is about lkr 500, but if you want something that doesn't taste like regret, you're looking at lkr 1,500-2,000. the job market? it's a mixed bag. tech and tourism are booming, but if you're in the arts like me, you're basically freelancing for exposure and the occasional free coffee.

overheard at the coffee shop



"taxes? i just pay whatever they tell me and hope for the best," said a guy at my usual spot, hands shaking from too much caffeine. "last year, i got audited because i forgot to declare my side hustle selling handmade candles. now i keep every receipt like it's a treasure map." another friend, a digital nomad, told me she just hires an accountant and pretends taxes don't exist until they magically disappear. spoiler: they don't.

a golden buddha statue sitting in front of a body of water

pro-tips for surviving



- keep every receipt. every. single. one.
- hire a local accountant if you can afford it. they speak the language of bureaucracy.
- file early. the irs here doesn't mess around.
- join expat forums like colombo expats on facebook for real talk.
- check out tripadvisor's colombo forum for tips from people who've been through the wringer.

the weather and nearby escapes



right now, it's hot and humid-like walking through soup. but hey, that's colombo for you. if you need a break, galle is just a couple of hours away by train, and it's got beaches, colonial charm, and zero tax forms. kandy's another option if you want cooler air and a giant buddha statue to stare at while you contemplate your life choices.

final thoughts



taxes in colombo aren't the end of the world, but they're definitely a headache. just remember: you're not alone. everyone here is winging it, one form at a time. and if all else fails, there's always wine. or more coffee. or both.


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About the author: Hugo Barrett

Just a human trying to be helpful on the internet.

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