Sri Lanka: New proposed tax measures following IMF review of “extended fund facility”
Overview of the proposed tax measures
Overview of the proposed tax measures
New proposed tax measures were agreed upon during the International Monetary Fund’s (IMF) second review under the “extended fund facility” for Sri Lanka, including:
- Imputed rental income tax on income of individuals from owner-occupied and vacant residential properties from April 2025
- Removal of exemption from corporate income tax for service exporters
- Increase in corporate income tax rate for sectors like betting, gaming, tobacco, and liquor from 40% to 45%
- Replacement of special commodity levy on certain items with 18% value added tax (VAT)
- VAT on digital services
- Gradual lifting of import restrictions on motor vehicles and other imports
- Repeal of simplified VAT by April 2025 and replacement with VAT refund system
- Increase in stamp duty on land leases
Read a June 2024 report prepared by the KPMG member firm in Sri Lanka
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