Context
Timeline of events
The tax changes, laws and loan events that shaped Sri Lanka's budgets, set against total spending in each year's Bill. Every entry links to its source.
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2019 Debt
New domestic and foreign classification
Following IMF guidelines for compiling government debt statistics, non-resident holdings of Sri Lanka Development Bonds and International Sovereign Bonds are classified as foreign debt, and resident holdings as domestic debt. The Central Bank states this applies from 2019 onwards.
Source: CBSL Economic and Social Statistics of Sri Lanka 2021, Table 5.1, note (c)
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2019-12-01 Tax
VAT cut to 8% and Nation Building Tax abolished
From 1 December 2019 the standard VAT rate was cut from 15% to 8% and the 2% Nation Building Tax was abolished, following Cabinet decisions announced on 27 November 2019.
Source: Avalara, Sri Lanka cuts VAT from 15% to 8%; Tax Advisor, Summary of recent tax changes w.e.f. 01.12.2019
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2020-03-02 Law and process
Parliament dissolved; spending runs on votes on account
Parliament was dissolved on 2 March 2020, six months before the end of its term. A vote on account covered the start of the year, and Cabinet approved a second one on 26 August 2020 for the period from 1 September until a Budget was approved. Budgets LK's 2020 figures come from the Budget Estimates book, which is why that year is shown at ministry level only.
Source: ISAS, Sri Lanka's 2020 parliamentary election; Newsfirst, Cabinet approves Vote on Account (26 August 2020)
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2022-04-12 Debt
Interim Policy on external debt servicing
The Ministry of Finance announced an Interim Policy on the servicing of Sri Lanka's external public debt. Debt service payments that became overdue after this date are not included in the outstanding balance for 2022 onwards.
Source: CBSL Annual Economic Review 2025, Table 16, note (b)
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2022-12 Debt
Guaranteed petroleum debt moved into government debt
From December 2022 the foreign currency debt of the Ceylon Petroleum Corporation that the government had guaranteed was absorbed into central government debt.
Source: CBSL Annual Economic Review 2025, Table 16, note (i)
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2023 Debt
Domestic debt compiled a new way
From 2023 the way domestic debt is compiled was changed, and it is based on data confirmed by the Ministry of Finance.
Source: CBSL Annual Economic Review 2025, Table 16, note (d)
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2023-03-20 IMF
IMF approves a 48-month Extended Fund Facility
The IMF Executive Board approved a 48-month Extended Fund Facility arrangement for Sri Lanka worth about US$3 billion, with about US$333 million available immediately. The programme aims to restore macroeconomic stability and debt sustainability.
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2024 Debt
Public Debt Management Act, No. 33 of 2024
The Public Debt Management Office was set up under the Ministry of Finance, as required by the Public Debt Management Act, No. 33 of 2024. It is now the official source for debt statistics, and the Central Bank compiles its table from the Ministry's data.
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2024-01-01 Tax
VAT rises to 18% and covers more goods
From 1 January 2024 the standard VAT rate rose from 15% to 18%, and VAT was extended to goods and services that had been exempt, including petrol, diesel and LP gas.
Source: Newsfirst, VAT net widens: consumers brace for impact (29 December 2023); Daily Mirror, VAT increases petrol, diesel, LP gas prices from January
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2024-2025 Debt
External debt restructuring reflected
The 2024 and 2025 debt figures reflect the impact of external debt restructuring. As at the end of 2025, the Central Bank notes that external debt restructuring has been largely completed, except for a small remaining portion.
Source: CBSL Annual Economic Review 2025, Table 16, notes (g) and (v)
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2025-04-01 Tax
New personal income tax bands and Rs 1.8 million relief
From 1 April 2025 (year of assessment 2025/2026) the personal relief rose to Rs 1,800,000 a year. The next Rs 1,000,000 is taxed at 6%, then 18%, 24% and 30% on each further Rs 500,000, and 36% on the balance. The My tax page uses these bands.
Source: Inland Revenue Department, notice to taxpayers, 26 March 2025
Events are added only when we can link to a published source. Missing something important? Tell us.