Sri Lanka's Court of Appeal has asked the Inland Revenue Department to clarify whether a recent legislative amendment affects its tax position against national cricket captains challenging Advance Personal Income Tax deductions.
The Court of Appeal is examining whether a newly amended Inland Revenue Act changes the tax authority's stance in legal proceedings brought by Sri Lanka's national men's and women's cricket captains. The captains are challenging the deduction of Advance Personal Income Tax (APIT) from their payments.
At a hearing before Court of Appeal President Justice Rohantha Abeysuriya and Justice K. Priyantha Fernando, the court questioned the Inland Revenue Department on the implications of the recent amendment, which explicitly classifies sports persons as Independent Service Providers—a designation that exempts them from APIT. The Deputy Solicitor General argued that the amendment does not apply to the cricketers, contending they are employees under contracts with Sri Lanka Cricket, and urged the court to proceed with judgment.
Counsel for the male captains presented a contrasting interpretation, noting that Parliament enacted the amendment specifically to resolve uncertain areas of tax law. He argued that sports persons, including cricketers, are now formally recognised as Independent Service Providers alongside other professionals such as doctors and lawyers. According to the counsel, cricketers had been classified as Independent Service Providers for over 15 years before the tax authority reclassified them as employees to impose APIT, an action he characterised as unlawful and arbitrary. The counsel also highlighted that withheld player payments over seven months had caused substantial financial hardship.
The court has already prepared its judgment but delayed its delivery pending the IRD's response. Both parties have been given one week to file additional submissions, with final judgment scheduled for August 31, 2026.
