Cabinet Approves Amendments to Key Tax Acts for 2026 Budget

The Sri Lankan Cabinet has approved amendments to three key tax acts, aligning with proposals outlined in the upcoming 2026 Budget. Revisions to the Telecommunication Tax Act No. 21 of 2011 aim to reflect current and past tax rates since 2014, apply taxes on uncollected income, and broaden provisions to telecommunication service providers. Additionally, the Finance Act No. 35 of 2018 will be amended to introduce a five-year tax exemption for new telecommunication towers erected on or after January 1, 2026, from the current Rs. 200,000 annual levy. Furthermore, amendments to the Value Added Tax Act No. 14 of 2002 include postponing the implementation date for VAT on services provided by non-resident electronic service providers to July 1, 2026. These legislative changes, some of which have received Attorney General's approval, are being drafted by the Legal Draftsman.