🇱🇰 Sri Lanka Budget 2027 in Brief: What changes, and by how much?

Sri Lanka's 2027 Budget was presented to Parliament by the President, with a strong focus on the digital economy and infrastructure, some taxes are coming down, some allowances are going up, and billions are being allocated for development. But what does it mean for ordinary people?

💰 TAXES & COST OF LIVING

⭕ PAYE taxpayers get some relief. Monthly tax-free income rises from Rs. 150,000 → Rs. 162,500, with tax savings ranging from Rs. 750 to Rs. 15,750 per month. PAYE tax slabs are also widened.

⭕ Books get cheaper, at least on the tax side. VAT on printed books and exercise books falls from 18% → 0%, while the general VAT rate stays at 18%.

⭕ Import taxes on some everyday foods are coming down. Sprats (හාල්මැස්සන්) Rs. 100 → Rs. 10/kg and Maldive fish (උම්බලකඩ) Rs. 302 → Rs. 10/kg.

⭕ Dried chillies also get tax relief. Whole chillies Rs. 100 → Rs. 50/kg and powdered chillies Rs. 125 → Rs. 75/kg.

⭕ Sugar goes the other way. Import tax increases from Rs. 50 → Rs. 60/kg.

These food tax changes take effect today, 13 November 2026.

⭕ Importers get some relief too. CESS rates will be reduced by 25% on 800 selected HS codes from April 2027.

👨‍💼 SALARIES & PENSIONS

⭕ No new salary increase for public servants. The final instalment of the 2025 salary increase will go ahead.

⭕ For doctors: DAT allowances rise from Rs. 70,000 → Rs. 95,000/month.

⭕ For nurses: The special duty allowance doubles from Rs. 6,000 → Rs. 12,000.

⭕ Other health workers also get a doubling of special duty allowances, from Rs. 2,000 → Rs. 4,000. These health allowance increases will be phased in from July 2027 to 2028.

⭕ Executive officers get higher vehicle allowances. Eligible officers will receive Rs. 100,000/month, up from Rs. 50,000.

⭕ University academics get an additional Rs. 25,000/month in allowances, while external lecturers' hourly payment rises from Rs. 1,500 → Rs. 4,500.

⭕ Trainee teachers get a substantial increase. Their monthly allowance rises from Rs. 10,500 → Rs. 20,000.

⭕ Some pensioners get an extra Rs. 2,500/month from July 2027. This applies only to those who retired between 2020 and 2024.

🏖️ TOURISM & BUSINESS

⭕ Tourism businesses get a major tax concession. The Tourism Development Levy of 1% or 0.5% will be abolished from April 2027. (Local-level taxes will continue; only the central government's TDL is being abolished.)

⭕ Tourism and export investors get a 200% capital allowance for qualifying BOI investments of at least USD 3 million.

⭕ Marine tourism gets a Rs. 500 million concessional loan scheme, while tourist attractions receive Rs. 35 million in additional funding for digital ticketing.

⭕ Small businesses get more financing support. Interest subsidy and refinancing allocations rise from Rs. 54.14 billion → Rs. 67.69 billion, with Rs. 174 billion in concessional loans targeted for 2027.

⭕ Importers and exporters can expect more digitalisation. Rs. 1.99 billion goes to the National Single Window, while Rs. 1 billion is allocated for Customs scanners.

⭕ Newspaper publishers get relief as newsprint import PAL falls from 10% → 0% from January 2027.

⚡ ENERGY & TRANSPORT

⭕ Rooftop solar owners get support for battery storage. A new subsidy of Rs. 25,000 per kW, up to Rs. 250,000 per eligible household.

⭕ Solar batteries get an import tax concession. PAL falls from 10% → 0%, although VAT remains at 18%.

⭕ Electricity storage is set to expand. Battery storage capacity is planned to rise from 160 MW in 2026 → 560 MW in 2027, with a target of 1,245 MW by 2029.

⭕ The electricity grid gets Rs. 26.5 billion for improvements, while Rs. 80 billion is allocated to begin electrifying three railway lines.

⭕ Roads and highways receive Rs. 487 billion, including Rs. 90 billion for Ditwah-related reconstruction.

⭕ Vehicle buyers get no general import tax reduction, despite the Budget's focus on reducing dependence on imported fuel.

🏠 WELFARE, HOUSING & EDUCATION

⭕ Persons with disabilities and kidney patients get higher allowances. Both increase from Rs. 10,000 → Rs. 12,500/month.

⭕ Aswesuma and other social protection programmes receive Rs. 230 billion in allocations for 2027.

⭕ Low-income families get more housing assistance. The grant increases from Rs. 1 million → Rs. 1.5 million per eligible house, with another 10,000 houses targeted.

⭕ Ditwah reconstruction receives Rs. 260 billion in previously approved but unused funding, including Rs. 90 billion for disaster-related housing.

⭕ Schoolchildren get broadband support, with vouchers planned for 750,000 selected students.

⭕ University students receiving eligible interest-free loans get higher living allowances, from Rs. 6,250 → Rs. 10,000/month.

⭕ The digital economy gets a larger allocation, rising from Rs. 18.5 billion → Rs. 28.5 billion, a 54% increase.

Overall, Budget 2027 offers targeted tax relief, higher allowances for selected groups and substantial infrastructure spending. However, there is no new general public sector salary increase, no general VAT cut and no vehicle import tax reduction.

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