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