President Anura Kumara Dissanayake, as the Finance Minister of the National People's Power administration presented his first budget (2025) at 10.30 am today.
In a Budget Speech lasting nearly 2 hours and 45 minutes, the President told Parliament that the Budget becomes historic as it lays the foundation for fulfilling the aspirations of the people for economic transformation of the country, by driving the economy towards sustainable growth and development.
"In this year’s budget, we have been able to allocate funds for many of our key priorities, although it may not be to the fullest extent that is desired. Whilst these focus areas are different to traditional budgets, we have also allocated funds for the continuity of ongoing initiatives, whilst making adjustments to align these with our mandate. This is evident in our increased expenditure on the Aswesuma programme and other social welfare priorities," the President stressed.
Through the proposals presented in this budget, the government is laying the foundation for a new paradigm in macroeconomic trajectory, the President said, adding that they expect economic growth of over 5 percent real GDP growth over the medium term.
Following are some highlights from the President's Budget 2025:
Sri Lanka’s network of Free Trade Agreements (FTAs) with strategic partners, particularly with a view to greater economic ties with ASEAN nations will be expanded through the Regional Comprehensive Economic Partnership (RCEP) and other agreements.
The Government will revisit the Economic Transformation Act with appropriate revisions to suit the emerging developments.
Government will lease out under-utilised state-owned land for productive economic activities.
A Public Private Partnership (PPP) Bill will be introduced.
The government will call for Expression of Interest for completion the proposed Colombo West Terminal 2 and Colombo North Port within a month.
Introduction of Sri Lanka Unique Digital Identification (SL-UDI) for all citizens is a key priority. SL-UDI is a foundational Digital Public Infrastructure (DPI) essential for the development of a digital economy. Steps have already begun towards this process and it is expected that this process will be expedited.
The President said the government's aim is to grow Sri Lanka’s Digital Economy to a level in excess of USD 15 Bn or 12 percent of the National Economy over the next 5 years. In achieving this ambition, the Government aims to facilitate an increase in the ICT industry’s annual export revenue to USD 5 billion. Accordingly, the government proposes to allocate Rs. 3,000 million to bolster the acceleration of Digital Economy Development through the initiatives described.
The Government has increased social protection programme net spending to Rs. 232.5 billion in 2025.
The government proposes to allocate Rs. 5,000 million from the state budget for the year 2025 to the 'Clean Sri Lanka programme,' in addition to the financial contribution of the donors.
The government proposes to increase the minimum monthly basic salary from Rs.24,250 to Rs.40,000 by Rs.15,750. The current ad-hoc interim allowance and special allowance will be integrated into the basic salary giving a net increase of Rs.8,250 in the minimum salary. The total estimated cost of this salary increase is expected to be Rs.325 billion. Considering present fiscal constraints, it is proposed that this salary increase be implemented in phases. Of the total net salary increase, Rs.5,000 and 30 percent of the balance amount will be paid starting from April 2025, with the remaining 70 percent being paid in equal portions beginning in January 2026 and January 2027.
The Employers' Associations have already agreed to increase the monthly Minimum Wage to the Private Sector workers from Rs. 21,000 to Rs. 27,000 in April 2025 and to Rs. 30,000 from 2026.
There are nearly 1.5 million plantation workers engaged in the sector, mainly in tea, rubber and coconut. The Government is of the view that their living standards need to be improved. In addition to the programmes focused on the development of plantation sector, the Government will intervene to increase the daily wages of the workers to Rs. 1,700.
For the year 2025, the bulk of revenue gains is expected to be delivered by the liberalisation of motor vehicle imports that took place on 1st February 2025. This process is being carefully monitored to ensure that import of vehicles does not result in undue negative impacts on external sector stability. Other key revenue measures which have already been announced in Parliament previously in December 2024 include the increase of tax-free threshold for personal income tax, further adjustments to the second income tax slab, removal of VAT on fresh milk
and yoghurt.
The Government also decided to not pursue this year the Imputed Rental Income Tax that had been agreed by the previous administration. To compensate for any revenue losses, the Government already presented in Parliament measures including the introduction of VAT on digital services, the imposition of corporate income tax on export of services, and an increase in the corporate tax on cigarettes/liquor, and gaming.
The full speech in all three languages (Tamil, Sinhala and English) can be accessed here.
Adani Green Energy Limited (AGEL) has withdrawn from the proposed project to establish 484MW wind farms in Mannar and Pooneryn, Sri Lanka.
Attorney General Parinda Ranasinghe has called the Acting Inspector General of Police (IGP) Priyantha Weerasooriya to carry out a probe on the leak of an important document sent to CID.
Leave Comments