Sri Lanka Enacts New Tax Law: What the Inland Revenue Amendments Mean for You

New Inland Revenue Amendment Act Comes Into Force

Sri Lanka has officially enacted the Inland Revenue (Amendment) Act No. 11 of 2026, bringing with it a series of significant changes to the country's tax landscape. The legislation introduces higher capital gains tax rates and expanded provisions that are expected to have far-reaching implications for individuals, businesses, and investors across the island.

Key Changes at a Glance

The amendment represents one of the more substantive revisions to Sri Lanka's inland revenue framework in recent years. Among the headline changes is an upward revision of capital gains tax rates, a move that signals the government's intent to broaden the tax base and increase state revenue amid ongoing fiscal consolidation efforts.

• Higher capital gains tax rates applicable to qualifying transactions
• Expanded scope of taxable income and asset categories
• Revised provisions affecting both resident and non-resident taxpayers

What This Means for Businesses and Investors

Tax professionals and financial advisors have urged businesses and individual investors to carefully review how the new provisions apply to their specific circumstances. Those involved in property transactions, share disposals, and other capital asset dealings are likely to feel the most immediate impact of the revised rates.

Taxpayers are strongly advised to seek professional guidance to assess their obligations under the new legislation and ensure full compliance ahead of applicable deadlines.

Government's Fiscal Strategy

The enactment of the amendment is widely seen as part of the government's broader strategy to strengthen domestic revenue mobilisation, a key condition tied to Sri Lanka's ongoing economic recovery programme. Expanding the tax net and tightening compliance mechanisms have been central pillars of fiscal reform discussions in recent months.

Further detailed guidance on the specific provisions and their application is expected to be issued by the Inland Revenue Department in due course, and affected parties are encouraged to monitor official communications closely.

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