Investment threshold cut to unlock SME capital allowances

The small and medium-sized enterprises (SMEs) would qualify for full capital allowances under a proposal to cut the investment threshold to US $ 250,000, from US $ 3 million, an Inland Revenue Department (IRD) official said.

- By SHANNINE DANIEL

At a KPMG Sri Lanka forum on Budget 2026, IRD Senior Commissioner A.M. Nafeel said the change aims to spur investment by smaller firms. He added that the government remains confident of meeting its 2026 tax target, driven largely by the Value Added Tax (VAT) and Social Security Contribution Levy (SSCL).

“Certain suppliers, who are supplying goods without a VAT invoice, will be compelled to issue a VAT invoice because the small-scale suppliers will also be liable to pay the VAT and SSCL,” he said.