While many fear that reducing the VAT threshold to Rs 36 million will cause inflation, Sri Lanka's recent history with VAT threshold reductions have proven otherwise. Read the latest op-ed on VAT threshold reductions by Arutha Director Rehana Thowfeek.

Signals a mismatch between announced policy and revenue projections. 

Prices should have reduced by 15%, but in reality only reduced by 6%.

"If revenue from PAL, CESS and SCL are expected to grow every year until 2028, signaling a clear mismatch between the hashtag#budget2026 policy announcement and the numbers underpinning the budget".

Imported big onions are 13% cheaper and imported potatoes are 35% cheaper than locally produced big onions and potatoes despite the special commodity levy (SCL) on imports.

Arutha's Rehana Thowfeek warns that Sri Lanka’s inward-looking trade policies have backfired. She urges tariff reform, fewer bureaucratic procedures, more digitisation, and better infrastructure to boost exports.

In this issue, we unpack the Simplified VAT (SVAT) system and explore the new risk-based refund scheme.

The government’s plan to scrap the Simplified VAT (SVAT) system faces resistance from businesses from several industries.

CEB is seeking a 6.8% tariff increase to cover it's losses amidst protests against power sector reforms.

Sri Lanka’s current Value Added Tax (VAT) framework has not kept pace with the growing volume of cross-border digital transactions. In response, the government is now moving forward with a proposal to extend the standard VAT rate of 18% to digital services provided from abroad to consumers in Sri Lanka. Arutha’s latest brief unpacks this new policy to better understand its implications.

SL has used tax exemptions to attract foreign direct investment for decades with limited success.

Sri Lanka may be a small player in global trade, but the recent US tariff hike is a big wake-up call.     "Sri Lanka obviously cannot flatten its trade deficit of over US$2 billion by simply buying more from the US. Further negotiations are possible, but a beneficial bilateral deal seems far from the horizon. Transshipping is not feasible. A 30% tariff looms. Repercussions are significant."

As wealth inequality increases globally, sentiments in favour of taxing the wealthiest in society continue to gain momentum. Although Sri Lanka experimented with taxes on wealth shortly after its independence, many of these measures have since been abolished. There are only a few minor taxes on assets at present, and these contribute little to government revenue. This begs the question: What should taxing wealth look like for Sri Lanka? Arutha’s newest publication “Understand