📈 CA Sri Lanka Unveils Comprehensive Proposals for Budget 2027

• Strategic Focus: Advocates for a compliance-led revenue growth model emphasizing digital transformation, tax fairness, and formalization over statutory rate hikes. • Personal Tax Relief: Proposes raising the Advance Personal Income Tax (APIT) threshold to Rs. 200,000/month, providing relief to middle-income earners while estimating a revenue contraction of ~Rs. 26.01 Bn against the 2026 baseline (~Rs. 79.08 Bn vs 2025 actuals). • Digital Infrastructure: Calls for an integrated data ecosystem combining a National Taxpayer Information Network (NTIN) and Universal Business Identification Number (UBIN). Suggests an AI-assisted Tax Compliance Risk Engine for high-risk detection (VAT fraud, shell companies) and automated Customs-Import reconciliation. • SME Support: Recommends a 4-tier corporate income tax framework (Micro: up to Rs. 20 Mn; Small: up to Rs. 350 Mn; Medium: up to Rs. 1 Bn; Large: >Rs. 1 Bn) with proportional compliance, simplified record-keeping, and CBSL-supported concessionary lending. • Sector & Structural Reforms: Highlights addressing tax erosion in tourism via a Digital Tourism Booking Framework, tackling 300k illegal DTH connections (~Rs. 1.5 Bn potential tax recovery), restoring cigarette tax share toward the 75% WHO benchmark (~Rs. 17.3 Bn recovery), and preparing for the OECD 15% global minimum tax (Pillar Two / QDMTT). • Taxpayer Rights & IRD Capacity: Recommends an Independent Taxpayer Ombudsman, a Right to Self-Correction, holding over tax collection during appeals, filling 223 IRD senior vacancies, and hiring specialized data scientists.