The president on December 18, 2024, presented various tax reform proposals to Parliament, including:
- Increase in rate of advance income tax (AIT) on interest from 5% to 10%--effective April 1, 2025
- Introduction of concessionary corporate income tax rate of 15% on foreign service providers—effective April 1, 2025
- Increase in corporate income tax (CIT) rate from 40% to 45% on gains and profits from betting and gaming, manufacture and sale or import of any liquor or tobacco products—effective April 1, 2025
- Reintroduction of exemption from value added tax (VAT) for locally produced liquid milk and locally manufactured yogurt—effective April 1, 2025
- Introduction of 18% VAT on nonresident digital service providers to Sri Lankan consumers
- Increase in stamp duty on leases to 2%
Read a December 2024 report prepared by the KPMG member firm in Sri Lanka