The personal relief jumped 50% — and the 12% slab is gone.
From 1 April 2025, the personal relief threshold rose from Rs. 1,200,000 to Rs. 1,800,000. The 12% slab — the second-lowest rate in the previous schedule — was removed entirely. For most salaried filers earning between Rs. 1.5M and Rs. 3M, this means a meaningful tax reduction year-over-year.
Advance Income Tax doubled to 10%.
Banks now withhold AIT on interest at 10% — up from 5%. Filers under the Rs. 1,800,000 personal relief threshold can submit a self-declaration to their bank to be exempted from withholding. Failure to declare correctly carries Section 181 risk.
SVAT is being repealed. VAT now applies to digital services.
The Simplified VAT (SVAT) scheme is repealed effective 1 October 2025. From April 2026, VAT applies to non-resident digital service providers selling into Sri Lanka. VAT registration becomes mandatory for importers and exporters regardless of turnover.
Paper returns are over.
From 1 July 2025, all VAT returns must be filed through the IRD's e-Filing portal. IIT and CIT will follow the same path. TaxWise files directly to the e-Filing portal on your behalf and stores the acknowledgement reference.
Refunds now must come within 30 months.
The IRD must process and pay valid VAT refunds within a 30-month window from the relevant period. This is a hard deadline written into the Act, not a target.