Books and printed material to be exempted from VAT under 2027 Budget

Daily Mirror, EconomyNext, Lanka Business Online, Newswire and Ada Derana report that President Anura Kumara Dissanayake outlined a proposed VAT exemption for books and printed materials in Sri Lanka’s 2027 Budget. Lanka Business Online and Newswire say the measure would apply to imports and supplies of exercise books, printed books, dictionaries, encyclopedias, children’s picture and colouring books, printed music and printed matter produced on single sheets. Newswire also lists textbooks and educational publications.

Newswire reports that printed books and related materials became liable for VAT in January 2024, while exercise books were already taxed earlier. Newswire says the President presented the proposal as a way to lower costs for educational resources and widen access to learning, knowledge and reading.

Lanka Business Online and Newswire report a proposed change to VAT on cinema tickets. Film producers, distributors, cinema hall operators and the National Film Corporation would each be taxed according to their portion of ticket revenue, rather than the entire ticket price. Lanka Business Online and Newswire say the calculation would use the amount after Entertainment Tax but before VAT.

Lanka Business Online and Newswire report proposals to end existing VAT exemptions for artemia eggs and coconut coir pith. Lanka Business Online says the eligible-exporter definition would expand to include newly VAT-registered businesses whose exports account for more than 80% of turnover over the previous six months. It also reports that VAT on foreign-currency transactions would be calculated using the Central Bank of Sri Lanka’s indicative exchange rate, as set by the Commissioner General of Inland Revenue.

Newswire reports that the proposed revisions are forecast to lower government revenue by Rs. 2.975 billion and are scheduled to take effect in April 2027. Lanka Business Online reports that the measures would begin once the formal changes to the VAT Act have been passed.