Highlights of the Post Budget Seminar 2025, organized by theNational Chamber of Commerce of Sri Lanka

The National Chamber of Commerce of Sri Lanka successfully hosted a successful Knowledge-Sharing session on Post Budget Analysis Seminar 2025 on 19^th of February at the National Chamber Auditorium, bringing together an esteemed panel of experts, policymakers, and industry leaders to analyze the impact of the National Budget 2025 on the economy and the business climate.

The National Budget 2025 was officially presented by H.E. President Anura Kumara Dissanayake on 17th February 2025, this post budget analysis seminar provided a comprehensive breakdown of key budgetary policies, taxation related proposals, government expenditure and revenue generation commitments.

Key Discussions and Insights: 

The expert panel featured Mr. Hasitha Raddella, (Principal Tax and Regulatory KPMG Sri Lanka), Ms. Jayani C. Wickrama Arachchi (Director, Department of Fiscal Policy, Ministry of Finance, Planning and Economic Development), Ms. S. Iyesha Asanthi (Commissioner, Tax Policy and Legislation, Inland Revenue Department), Mr. Ruwan Fernando (National Chamber Council Member & Former Partner E & Y). The session was moderated by Mr. Nandika Buddhipala, a respected finance and investment professional (CFO of Commercial Bank PLC, Past President of The National Chamber of Commerce of Sri Lanka).

The discussions covered key aspects of the budget which may have implications on the business community, sectoral implications including the highlights of the key economic features, fiscal projections and proposed changes to the tax structure outlined for the year 2025, Mr. Hasitha Radella, Principal Tax and Regulatory KPMG Sri Lanka presented an overview of the Tax reforms, stated “…As Sri Lanka continues its recovery, budget is focused on several taxation reforms with sustained improvements in fiscal management will be key to maintaining growth momentum for the country…discussed about positive aspects of the proposals such as ease of paying taxes and government expectations to enable the ease of doing business mainly through the digitalization of public services, however VAT implications on the digital services are yet to be further clarified..” . 

“…Clarifications on the Simplified Value Added Tax (SVAT) system and the transition from SVAT to a Risk-Based Refund System that will streamline the VAT refund process to an efficient process was explained by Ms. Iyesha Asanthi, Commissioner Tax Policy & legislation, Inland Revenue Department. Further commented that if any eligible exporter who exports more than 50 percent of total supplies is willing to get VAT Refunds under new risk-based refund system he can be included to the pilot project… Current VAT threshold is LKR 15 million per quarter and LKR 60 million per year at the standard rate 18%. Due to current situation of the country the budget proposals of 2025 doesn’t include tax exemptions or concessions, however the budget proposals made to amend individuals’  tax rates by increasing tax relief from Rs1.2 million to 1.8 million and by relaxing tax brackets the individuals including employees will be benefitted…”

Ms. Jayani Wickrama Arachchi, (Director Fiscal Policy Dept of Ministry of Finance, Planning and Economic Development highlighted… “With fiscal space being highly constrained, every policy move must be strategic-ensuring key fiscal targets are protected while safeguarding economic stability in the medium term.. and the interest payments remain a significant burden, accounting for a substantial government recurrent expenditure, primarily due to Sri Lanka’s high borrowing costs. We need to move ahead despite these challenges…”

Mr. Nandika Buddhipala, (CFO of Commercial Bank PLC) emphasized “…We appreciate the government efforts to come up with 2025 Budget with unprecedented constrains, inter alia, Public Finance Management Act and IMF Debt Sustainability Framework, however, making sure the alignment with them. Furthermore, it is extremely important to be cognizant of the persisting debt servicing and interest cost burden and our concrete plans  with regard to creating conduce environment for export oriented and FDI conducive economy with decreasing emphasis on non-tradable orientation.“

Further mentioned about proposal to enhance Sri Lankas network of FTAs, especially with ASEAN nations, through participation in the Regional Comprehensive Economic Partnership (RCEP) and other agreements would be favourable for the business community. Expansion of DTAs beyond the current 46, prioritizing countries with significant countries with significant trade and investment potential would be more advantageous to the country.

Mr. Ruwan Fernando, Council member of the National Chamber of Commerce of Sri Lanka also added his comments, noting that “Budget 2025 looks optimistic and presents a forward-thinking approach in supporting the business community. The allocation of resources towards innovation and export growth will create a more dynamic and resilient economy.”

Attendees gained insights to understand the policy changes and capitalize on new opportunities. During the Q & A session the participants clarified on the plans to establish a development bank to provide Development Bank Establishment tailored financial solutions for SMEs and new entrepreneurs within the existing state bank framework and the focus on providing relief to the exporters.  

The National Chamber of Commerce reaffirmed its commitment to empowering the business community with timely and expert-driven insights. The Post Budget Seminar 2025 was praised for its engaging discussions and valuable takeaways, helping businesses to strategize for the year ahead.