Sri Lanka: Tax measures in 2025 budget
Includes direct and indirect tax measures
The president on February 17, 2025, presented the 2025 budget to Parliament, which included the following direct and indirect tax measures:
Direct tax
- Increase of corporate income tax rate for cigarette, liquor, and gaming businesses from 40% to 45%
- Removal of exemption and application of 15% concessionary corporate income tax on export of services
- Imposition of income tax on life insurance and other receipts
- Increase in capital gains tax rates
- Various individual (personal) income tax changes
Indirect tax
- Replacement of simplified value added tax (SVAT) scheme
- Introduction of 18% VAT on digital platform services
- Various VAT exemptions
- Amendments to social security contribution levy
- Changes to import tax levies on motor vehicles
Read a February 2025 report prepared by the KPMG member firm in Sri Lanka