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