Budget 2026: Balancing Reform & Recovery 📈

President/Finance Minister Anura Kumara Dissanayake presented the 2026 Budget, shifting focus from crisis management towards cautious reconstruction and institutionalising fiscal prudence. • Key Fiscal Targets: • Total Revenue & Grants projected at Rs. 5,300 Bn. • Tax Revenue targeted at 14.2% of GDP (Rs. 4,910 Bn). • Budget Deficit set at 5.1% of GDP (Rs. 1,757 Bn). • A Primary Surplus of 2.5% of GDP is targeted, aligning with IMF commitments. • Capital Investment is raised to 4% of GDP. • Tax Policy & Compliance: • Major base broadening: The VAT and SSCL thresholds are reduced from Rs. 60 Mn to Rs. 36 Mn per annum (eff. 1 April 2026) to formalise SMEs. • Digital compliance is prioritised via mandated e-invoicing and the revamped RAMIS 2.0 system. The VAT rate is retained at 18%. • Growth & Investment Focus: • Concessional Corporate Tax (15%) is maintained for sectors like IT, Renewable Energy, and Export Services. • Incentives (tax holidays/accelerated depreciation) are offered for investments in green energy, data centres, and technology parks. • Rs. 5 Bn allocated for plantation sector wage reform and productivity enhancement. • Social Protection: • Targeted welfare includes salary increases for teachers, principals, and plantation workers. • Rs. 20.75 Bn allocated for the “Praja Shakthi” program to decentralise local development. The Budget aims for macroeconomic stability anchored in development, digital transformation, and targeted social equity to rebuild trust and competitiveness.