A civil-society group has published a list of 12 tax revisions it says the government has introduced over the past two years, arguing that together they have pushed up the burden on households across income levels.
The statement came from Rajith Keerthi Tennakoon, Executive Director of the Center for Human Rights and Research (CHR) Sri Lanka, and was reported by Hiru News on Sunday night. This is criticism from outside government, not a government announcement — a distinction worth stating plainly, because the list reads like a policy document.
Tennakoon said the revisions have reached food, education, health, transport and online businesses. He attributed rising inflation, tighter financial transactions, increased poverty and falling investment to the increases, and said conditions had become discouraging for foreign direct investment. Small and medium enterprises, he said, have come under heavier pressure from the changes than large businesses.
The 12 revisions as listed
| Date | Measure |
|---|---|
| Jan 2025 | Excise duty up about 6% on liquor, cigarettes, tobacco, sweetened beverages and motor vehicles |
| Feb 2025 | Electric vehicle tax rates doubled |
| Feb 2025 | Vehicle import exemptions removed; 20% duty plus a 50% surcharge, an overall 30% |
| Apr 2025 | Withholding tax on bank deposit interest raised from 5% to 10% |
| Apr 2025 | Corporate tax on liquor, tobacco, betting and gaming firms from 40% to 45% |
| Apr 2025 | Income tax of up to 15% on service exports and foreign-source income previously exempt |
| Apr 2026 | Customs import duties restructured into bands of 0%, 10%, 20% and 30% |
| May 2026 | 2.5% Social Security Contribution Levy applied to vehicle imports |
| May 2026 | A further 50% surcharge on the 30% vehicle duty, an effective 45% |
| Jun 2026 | Capital gains tax: individuals and partnerships 10%→15%; trusts, mutual funds and NGOs 10%→30% |
| Jun 2026 | 5% withholding tax on professional income above Rs 100,000 a month |
| Jul 2026 | 18% VAT on digital services from foreign companies not registered in Sri Lanka |
Low-income earners can claim relief from the bank-interest withholding tax by self-declaration, the statement notes. The professional-services levy is listed as catching photographers, artists, IT specialists and social media professionals. The vehicle surcharge has been extended to 31 December 2026. On the digital services VAT, the statement adds that practical implementation is not yet complete.
Two figures that look wrong and are not
Both vehicle entries describe a surcharge levied on the duty rather than added to it: 20% raised by half gives 30%, and 30% raised by half gives 45%. Read as simple addition they would appear to be errors. They are internally consistent, and the two entries together trace one rate rising from an effective 30% in February 2025 to an effective 45% in May 2026.
What CHR asks for
Tennakoon called on the government to weigh, in the forthcoming Budget, revisions bearing on nutrition, health, education and industry — giving priority in particular to food, medicines and medical equipment, school supplies, and raw materials for the fisheries and agriculture sectors.
Sourcing, and two notes on wording
This rests on a single verified newsroom. Ada Derana has also filed, headlined “Government introduced 12 tax revisions over two years: CHR Sri Lanka,” but adaderana.lk has returned a CloudFront 403 to this desk for roughly fifty consecutive days, so its publication date could not be extracted and it could not be cited under this site’s sourcing rules. Aggregator repostings exist but do not count as independent newsrooms here.
Hiru’s headline refers to the administration as the “Malima” government — malima is the compass, the National People’s Power election symbol — and renders the organisation’s name without “and Research.”
The figures and effects above are CHR’s characterisations. This desk has not independently verified each revision against the relevant gazette or Inland Revenue amendment, and no government response to the list had been reported when this was written.