By: Staff Writer
February 23, Colombo (LNW): The National Chamber of Commerce of Sri Lanka organized the Post-Budget Analysis Seminar 2025 on February 19, providing an in-depth review of the National Budget 2025. The event brought together industry leaders, policymakers, and financial experts to evaluate the budget’s economic and business implications.
The seminar offered a thorough examination of key fiscal policies, tax proposals, government expenditure, and revenue-generation strategies.
The expert panel featured prominent figures such as Hasitha Raddella, Principal of Tax and Regulatory at KPMG Sri Lanka; Jayani C. Wickrama Arachchi, Director of the Department of Fiscal Policy at the Ministry of Finance, Planning, and Economic Development; S. Iyesha Asanthi, Commissioner of Tax Policy and Legislation at the Inland Revenue Department; and Ruwan Fernando, former Partner at Ernst & Young and National Chamber Council Member. The session was moderated by Nandika Buddhipala, CFO of Commercial Bank PLC and past president of the National Chamber of Commerce of Sri Lanka.
The discussion explored critical aspects of the budget, including its impact on businesses, sector-specific implications, and proposed tax reforms. Hasitha Raddella highlighted that the budget aims to enhance Sri Lanka’s fiscal management while focusing on taxation reforms to drive economic growth. He emphasized the government’s commitment to digitalizing public services to facilitate business operations, although clarifications on VAT implications for digital services remain pending.
Iyesha Asanthi elaborated on the transition from the Simplified Value Added Tax (SVAT) system to a Risk-Based Refund System, which is expected to streamline VAT refund processes. She noted that exporters selling over 50% of their total supplies may participate in a pilot project for the new system. The standard VAT rate remains at 18%, with the threshold set at Rs. 15 million per quarter and Rs. 60 million annually.
Due to the prevailing economic situation, the 2025 budget does not include tax exemptions or concessions. However, individual taxpayers will benefit from an increased tax relief threshold, rising from Rs. 1.2 million to Rs. 1.8 million, alongside relaxed tax brackets that will positively impact employees.
Addressing fiscal constraints, Jayani Wickrama Arachchi emphasized the importance of strategic policy implementation to maintain economic stability while managing high-interest payments resulting from Sri Lanka’s debt obligations. She stressed the necessity of progressing despite these financial challenges.
Nandika Buddhipala acknowledged the government’s efforts in formulating the 2025 budget amid stringent fiscal conditions, including compliance with the Public Finance Management Act and the IMF Debt Sustainability Framework. He underlined the urgency of addressing debt servicing and interest costs while fostering an economy conducive to exports and foreign direct investment (FDI). Buddhipala also welcomed proposals to expand Sri Lanka’s Free Trade Agreements (FTAs), particularly through participation in the Regional Comprehensive Economic Partnership (RCEP), and the extension of Double Taxation Agreements (DTAs) beyond the existing 46 nations.
Adding to the discussion, Ruwan Fernando described the budget as forward-thinking, emphasizing its focus on innovation and export growth to enhance economic resilience. He praised the allocation of resources aimed at strengthening the business sector.
Attendees gained valuable insights into the policy shifts and emerging business opportunities. During the Q&A session, participants sought clarifications on the establishment of a development bank to support SMEs and new entrepreneurs, as well as on measures to provide relief to exporters.
The National Chamber of Commerce reaffirmed its dedication to equipping the business community with timely and expert-driven insights. The Post-Budget Analysis Seminar 2025 was widely appreciated for its engaging discussions and practical takeaways, assisting businesses in planning for the year ahead.
