Sri Lanka’s national cricketers have won their legal battle against the Inland Revenue Department (IRD), with the Court of Appeal quashing a decision that classified contracted national players as employees of Sri Lanka Cricket for tax purposes with retrospective effect.A Court of Appeal bench comprising President Justice Rohantha Abeysuriya and Justice Priyantha Fernando delivered the judgment in open court on Monday (31), with several national cricketers present.

The dispute arose from a decision implemented by the Inland Revenue Department in October 2024 to classify national cricketers as employees of Sri Lanka Cricket and, on that basis, apply Advance Personal Income Tax (APIT).

The decision had retrospective effect.Sri Lanka’s contracted male and female cricketers challenged the decision through their respective captains, arguing that they were not employees of Sri Lanka Cricket and had for years been recognised as independent service providers.The players maintained that taxes applicable to them should therefore be collected under the provisions governing independent service providers rather than by treating them as employees.

During the proceedings, the cricketers also argued that they did not receive employment benefits typically associated with an employer-employee relationship, including Employees’ Provident Fund (EPF), Employees’ Trust Fund (ETF), gratuity, annual leave and maternity leave.They further claimed that professional contractual payments had been withheld for several months as a result of the retrospective application of the IRD decision.More than 50 contracted national cricketers, both male and female, placed their grievances before the Court through affidavits, according to counsel representing the players.

Following the judgment, counsel for the male cricketers, Nishan Sydney Premathiratne, said there had been a public misconception when the case was initially filed that the players were attempting to avoid paying taxes.He said the players had instead challenged what they considered a wrongful classification that effectively treated them as Sri Lanka Cricket employees for the application and collection of APIT.Premathiratne also expressed appreciation to the Court of Appeal for extensively hearing the matter.The judgment follows arguments earlier this month over a recent amendment to the Inland Revenue Act that expressly categorized “sports persons” as Independent Service Providers.

During the previous hearing, the Court sought clarification from the IRD on whether the legislative amendment would result in it reconsidering the decision challenged by the cricketers.The IRD maintained that the amendment did not apply to the petitioners and argued that national cricketers were employees due to their contractual relationship with Sri Lanka Cricket.

The Court subsequently allowed both parties to make further submissions before fixing August 31 for judgment.Nishan Sydney Premathiratne appeared with attorneys Shenali Dias and Sidath Gajanayaka, instructed by Gamindu Karunasena, for the petitioners representing the male cricketers.President’s Counsel Dr. Harsha Cabral appeared with attorneys Vikum Jayasinghe and Manith Dasanayake, also instructed by Gamindu Karunasena, for the petitioners representing the female cricketers.Deputy Solicitor General Manohara Jayasinghe appeared for the Attorney General representing the Inland Revenue Department.President’s Counsel Kuvera de Soyza, with attorney Sajana de Soyza, instructed by Sanjay Fonseka, represented former members of Sri Lanka Cricket.