The Hon. Nishantha Jayaweera - Deputy Minister of Economic Development

¶ 01 Mr. Speaker, the Social Security Contribution Levy (SSCL) Amendment Bill presented today contains two main amendments.

¶ 02 First, previously, an importer of motor vehicles paid SSCL at the point of resale of the imported vehicle, not at importation. Under this amendment, SSCL will be charged at the point of importation, not at resale.

¶ 03 Second, the SSCL liability threshold is reduced. Until now, persons/businesses with an annual turnover exceeding Rs. 60 million were liable; under this amendment, the threshold is reduced to Rs. 36 million.

¶ 04 Our medium-term policy is to increase revenue while reducing the burden on taxpayers. We do this through four pillars: 1. Introducing modern technology to tax administration: we are localizing maintenance and development of the Inland Revenue Department’s systems with the Ministry of Digital Economy and introducing e-invoicing for VAT. 2. Simplifying the tax system by removing unnecessary complexities through legal amendments and technology. 3. Broadening the tax base. 4. Improving tax compliance.

¶ 05 We have already provided relief such as adjustments to personal income tax, exempting dairy products from VAT, and removing certain withholding taxes on interest. While granting relief to taxpayers, we forgo over Rs. 75 billion in revenue, yet set a historic IRD collection target of Rs. 2,401 billion and expect to surpass Rs. 241 billion monthly collections for the first time, showing revenue can increase alongside relief.

¶ 06 With the new Government’s policy direction, taxpayer confidence and IRD efficiency have improved. Today we also present Rules under the Monetary Law Act to allow exporters to invest, up to a cap of 10 percent of repatriated export proceeds, in domestic dollar bonds—an incentive to fully repatriate export earnings.

¶ 07 Further, under the Strategic Development Projects Act, we introduce a rule-based tax exemption framework, replacing ad hoc exemptions. Investors will know, by sector, investment size and jobs created, the duration and nature of any concessions—typically 5 to 10 years—covering customs duty, Cess, PAL and VAT exemptions for imports during the project implementation period (excluding vehicles). These do not apply to gambling or betting activities.

¶ 08 Alongside the Colombo Port City framework, these measures aim to attract over USD 2 billion in investments in 2026, after surpassing USD 1,057 million in 2025.