Budget 2027 exempts books and printed material from VAT, three years after the tax was imposed

Books and printed educational material will be exempted from Value Added Tax under the 2027 Budget, reversing a tax that was extended to printed books in January 2024.

President Anura Kumara Dissanayake announced the exemption while presenting the budget in Parliament on Thursday. It covers both the import and the local supply of the listed items, classified by Harmonized System (HS) code for customs purposes, and will be enacted through amendments to the Value Added Tax Act No. 14 of 2002, the Daily Mirror reported.

What is covered

The exemption applies to exercise books, printed books, dictionaries and encyclopedias, children’s picture, drawing and colouring books, printed matter in single sheets, and music books and printed music in other forms.

“Recognizing the importance of education and the necessity of ensuring that essential educational materials are available at an affordable price, and with the objective of promoting access to education, knowledge and reading, we propose to exempt textbooks, dictionaries, encyclopaedias, children’s drawing and colouring books, educational publications and other printed books, as well as exercise books, from Value Added Tax,” the President told Parliament, as reported by EconomyNext.

A reversal, not a new concession

EconomyNext records the history that gives the measure its significance: printed books became subject to VAT with effect from January 2024, while exercise books had been taxed before that. The budget therefore undoes a charge imposed under the revenue-raising measures of the previous two years rather than creating a fresh exemption.

The change is part of a wider set of VAT amendments. LankaBusinessOnline reports that the same package moves in the opposite direction on two commodities — existing VAT exemptions on artemia eggs and coconut coir pith are to be removed, bringing both back into the tax net.

LankaBusinessOnline states the VAT amendments take effect from 1 April 2027, and that all the measures come into force on passage of the formal legislative amendments to the Act. The Daily Mirror and EconomyNext filings on the books exemption do not carry an effective date.

Not reported

No filing gives the revenue cost of the books exemption on its own, says how much VAT on printed books had been raising since 2024, or explains why artemia eggs and coir pith lose their exemptions. None states the current VAT rate applied to books, and none quotes publishers, printers or booksellers.