Sri Lankan Cricketers Take Cricket Board To Court Over Tax Dispute

Kaushik Kashyap

Sri Lankan cricketers amid tax disputes. [Source - Newswirelk/x.com]Sri Lankan cricketers amid tax disputes. [Source - Newswirelk/x.com]

In a significant development, Sri Lankan cricketers have taken legal action over a personal income tax dispute involving Sri Lanka Cricket (SLC) and the Inland Revenue Department (IRD). The case, filed in March, questions the players’ employment status in relation to tax obligations.

Sri Lankan Cricketers Initiate Legal Proceedings Against SLC on Tax Issue

The petitioners, including top Sri Lankan male cricketers like Dhananjaya de Silva and Charith Asalanka, alongside women’s stars Chamari Athapaththu and Anushka Sanjeewani, argue that they are not employees of SLC but rather individual service providers. 

The cricketers' claim is that their contractual relationships should not be seen as formal employment, but service providers. Their income from playing cricket for Sri Lanka should not attract employee-level taxation.

Their legal challenge aims to contest the IRD’s move to impose Advance Personal Income Tax (APIT) deductions based on their earnings as a cricketer. The Solicitor General’s Department contended that the players are, by virtue of signing contracts with SLC, employees under the definitions set out in the Inland Revenue Act.

APIT Deductions Deferred for Sri Lankan Cricketers Pending Final Verdict

During a hearing held on Tuesday, an interim settlement was reached. Under this arrangement, the IRD agreed to begin APIT deductions only from June onwards and also attempts to recover APIT for the past years 2022/23 and 2023/24 will be paused until the conclusion of the case.

The interim relief gives the cricketers some breathing room while the legal question over their employment status classification is examined in detail. The Court of Appeal has fixed the next hearings for November 6, 14, and 18 later this year, allowing all parties time to further prepare their arguments.