Govt. tax concessions revenue loss hits Rs. 787 b since April 2023; 1H 2025 at 57%

Ministry of Finance Tax Expenditure Statement shows Rs. 285.7 b in exemptions recorded in 1H 2025 Rs. 501.4 b reported for 2023/24 and 2024 periods

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SRI Lanka's tax exemptions and concessions reached Rs. 285.7 billion in the first six months of 2025, equal to 57% of the total tax expenditure recorded since April 2023, according to the latest Tax Expenditure Statement published by the Ministry of Finance in November.

The data shows that the scale of foregone revenue remains substantial despite efforts to broaden the tax base and meet revenue objectives under the economic recovery program.

The statement records Rs. 501.4 billion in tax exemptions for the financial period 2023/24 and 2024 fiscal year across Corporate Income Tax, Personal Income Tax, Value Added Tax, the Social Security Contribution Levy, Excise Duty, Customs Import Duty and the Luxury Tax on Motor Vehicles.

Combined with the Rs. 285.7 billion recorded from January to June 2025, total exemptions since April 2023 period amount to a staggering Rs. 787.1 billion. Sri Lanka's Tax Expenditure Statement presents two distinct reporting periods, and the totals must be viewed separately because they do not use the same fiscal cycle. The 2023/24 values relate only to income taxes assessed for that year, while the 2024 values capture expenditure from consumption and trade taxes on a calendar-year basis.