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Chartered Accountancy is one of the most respected and globally recognized professions in the field of finance and business. A Chartered Accountant (CA) is a highly trained financial expert who plays a vital role in maintaining the integrity, transparency, and sustainability of businesses, organizations, and economies. In Sri Lanka and across the world, Chartered Accountants are trusted advisors who ensure accurate financial reporting, regulatory compliance, tax efficiency, and strategic business growth. They are not just number-crunchers — they are strategic partners in decision-making, governance, and long-term success. The journey to becoming a CA is rigorous, requiring years of academic study, professional examinations, and practical training. This ensures that every Chartered Accountant possesses deep technical knowledge in accounting, auditing, taxation, corporate finance, and business law. At AG Associate, we are proud to be led by qualified Chartered Accountants with over 20+ years of experience. We deliver end-to-end financial solutions — from company registration and audit & assurance to taxation, accounting outsourcing, and business consulting — all with the highest standards of professionalism and client commitment. Whether you're a startup, a growing enterprise, or a foreign investor entering Sri Lanka, partnering with a Chartered Accountant means you're choosing accuracy, compliance, and strategic insight. Trust the experts. Choose experience. Choose excellence.

Sri Lanka Budget 2025: Fuelling Growth, Unlocking Tomorrow

Sri Lanka’s 79th National Budget, presented by President Anura Kumara Dissanayake, sets a bold vision for inclusive growth, digital transformation, and fiscal discipline. With a projected economic growth of 5% and total expenditure of Rs. 4,218 Bn, the budget aims to stabilize the economy while preparing for debt repayments starting in 2028.

🔍 Key Highlights

📊 Economic Strategy

• Revenue to GDP target: 15.1%

• Budget deficit: Rs. 2,200 Bn (6.7% of GDP)

• Tax revenue growth: Driven by VAT on digital services, higher CIT on exports, and increased excise on liquor, tobacco, and gaming.

💼 Direct Tax Reforms

• CIT hike: From 40% to 45% for liquor, tobacco, and gaming.

• Capital Gains Tax: Raised to 15% for individuals and partnerships; 30% for trusts and NGOs.

• Service Export Tax: Exemption removed; now taxed at 15%.

• Personal Relief: Increased to Rs. 1.8 Mn; revised tax slabs offer significant savings for middle-income earners.

🧾 Indirect Tax Changes

• SVAT abolished: Replaced with a risk-based refund system.

• VAT on digital platforms: 18% on non-resident providers.

• Mandatory POS machines: For VAT-registered businesses.

• New VAT exemptions: Fresh milk, yoghurt, and pharma packaging materials.

🚗 Motor Vehicle Import Taxes

• Import ban lifted: Effective Feb 2025.

• Customs Duty + Surcharge: Combined rate of 30%.

• Excise Duty for EVs: Increased by 100%.

• VAT on imports: Now 18%.

🏛️ Governance & Legal Reforms

• Tax Appeals Commission: Fees increased; new mediation provisions introduced.

• Digital ID & Apex Digital Authority: To streamline services and boost innovation.

• New legislation: Investment Protection Act, Public Procurement Law, and AML/CFT reforms.

📈 Economic Outlook

• Inflation: Declined to -1.7% in Dec 2024; deflation continues into 2025.

• Foreign reserves: Surged to USD 6.5 Bn.

• Debt restructuring: USD 12.5 Bn restructured; credit ratings upgraded.

• Tourism: Targeting USD 5 Bn in revenue with 3 Mn arrivals.

Personal Income Tax Rates (Effective from 1 April 2025)

Notable Changes:

• Personal relief increased from Rs. 1.2 Mn to Rs. 1.8 Mn.
• Revised slabs offer substantial tax savings, especially for middle-income earners.
• Senior citizens can manually file returns and benefit from a simplified WHT refund mechanism.

Corporate Income Tax (CIT) Rates

Additional Notes:

• The 15% rate on service exports replaces the previous exemption.
• Capital Gains Tax for companies remains unchanged at 30%.
• VAT on digital services and stricter compliance measures are also introduced.