The Hon. (Dr.) Anil Jayantha

¶ 01 Hon. Speaker, on behalf of the Minister of Finance, Planning and Economic Development, I table the answer.

¶ 02 Answer tabled:

¶ 03 (a) (i) Information has already been made public. The IMF website’s Sri Lanka country page contains detailed staff reports at programme initiation under the Extended Fund Facility (EFF) and subsequent reviews, outlining the policies agreed with the IMF. The reports can be accessed via the following links (placed as Annex 01 in the Library): - 2023/03/20: Sri Lanka—Request for an Extended Arrangement under the EFF (Press Release/Staff Report) - 2023/12/12: First Review under the EFF - 2024/06/13: Article IV Consultation and Second Review under the EFF - 2025/03/03: Third Review under the Extended Arrangement under the EFF - 2025/07/02: Fourth Review under the Extended Arrangement under the EFF

¶ 04 (ii) Two reviews before September 2024: December 2023 (First Review) and June 2024 (Second Review).

¶ 05 (iii) As of 23 September 2024, when we assumed office, the previous Government had reached agreement with the IMF staff for the Third Review on the following revenue measures: 1. Property tax based on deemed rental income. 2. 30% corporate income tax on services exports. 3. Removal of certain special excise items and replacement via VAT. 4. No proposals to raise PIT tax-free thresholds or bands, nor to grant new VAT exemptions for essential goods/services. 5. Removal of Simplified VAT (SVAT) by April 2025.

¶ 06 Details are in the IMF links cited in Annex 01.

¶ 07 (iv) After September 2024, two reviews were successfully completed (March 2025 and July 2025).

¶ 08 (v) After assuming office on 23 September 2024, we commenced the Third Review and reached staff-level agreement on 22 November 2024. Through this process we secured the following reliefs: 1. Increase the PIT tax-free threshold from Rs. 100,000 to Rs. 150,000 per month. 2. Expand the first PIT bracket (taxed at 6%) from Rs. 500,000 to Rs. 1,000,000, reducing PIT burden across income levels (details placed as Annex 02 in the Library). 3. Remove VAT on domestically produced fresh milk and yoghurt to improve child nutrition. 4. Defer property tax based on deemed rental income until a proper valuation base and procedures are established. 5. Reduce the previously agreed 30% corporate tax on services exports to 15%. 6. Increase withholding tax (WHT) bands from 5% to 10% to improve compliance and broaden the tax net, while enabling persons with monthly income below the PIT threshold of Rs. 150,000 and those below the 10% PIT rate to apply for WHT exemptions or lower WHT rates via the Inland Revenue Department, with rapid guidance mechanisms established at IRD headquarters and provincial offices. 7. Remove all restrictions on vehicle imports.

¶ 09 (vi) Final approval for Sri Lanka-proposed amendments is granted by the IMF Executive Board.

¶ 10 (vii) See answer at (a)(v).

¶ 11 (viii) See answer at (a)(v).

¶ 12 (ix) See answer at (a)(v).

¶ 13 (b) Does not arise.

¶ 14 OIL TANKS OF CEYLON PETROLEUM CORPORATION IN TRINCOMALEE HARBOUR: INCOME EARNED

¶ 15 312/2024