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Sri Lanka: Strategic Development Projects (Amendment) Act, No. 26 of 2025

Effective December 17, 2025

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January 6, 2026

The Strategic Development Projects (Amendment) Act, No. 26 of 2025 includes the following changes to the tax incentive scheme for strategic development projects (SDP)—effective December 17, 2025:

  • Maximum tax holiday reduced from 25 to 10 years
  • Transitional provision
  • Revised identification procedure for SDP
  • Ex-post monitoring of the SDPs and sanctions for non-compliance
  • Procedure to be followed prior to imposing sanctions
  • Mandatory tax compliance
  • Issuance of the expenditure statement and review mechanism
  • Power to make regulations by the Minister

Read a January 2026 report prepared by the KPMG member firm in Sri Lanka

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