The government has announced that Value Added Tax (VAT) at 18% will be imposed on income earned through online services provided by foreign individuals and platforms to users in Sri Lanka, effective Oct. 01.

This move follows the issuance of an extraordinary gazette notification by the Commissioner General of Inland Revenue, Rukdevi Himali Fernando, aimed at regulating and taxing the growing sector of cross-border digital services.
Under the new regulation, the VAT will apply to a wide range of services, including but not limited to:

• Software as a Service (SaaS)
• Online stores and marketplaces
• Digital advertising and marketing
• Cybersecurity and IT support services
• Video, music, and live-streaming platforms
• Online banking and financial tech services
• Social media and on-demand platforms
• Hotel booking and ticket reservation apps
• Online gaming platforms

The regulation also clarifies that any other digital service provided via an electronic platform from outside Sri Lanka to individuals residing in the country will be subject to VAT, even if not explicitly listed.

Foreign service providers are required to register for VAT if their supply of services exceeds Rs. 60 million annually or Rs. 15 million in the past three months. Prior to registration, such non-residents must also obtain a Taxpayer Identification Number (TIN).

This development comes amid growing debate over taxing foreign exchange earners and aims to expand the country’s tax base in the digital economy.

(dailynews.lk)

(Except for the headline, this story, originally published by dailynews.lk has not been edited by SLM staff)

A CEOs delegation of the Confederation of Indian Industry (CII), led by Mr. Sanjiv Puri, Immediate Past President, CII and Chairman & Managing Director of ITC Limited, visited Colombo from 29 June to 02 July 2025. 

The visit followed an invitation extended by the President of Sri Lanka during his State Visit to India in December 2024. The delegation comprised over 15 prominent Indian business leaders representing diverse sectors including hospitality, manufacturing, energy, healthcare, textiles, and tourism, among others.

During the visit, the CII delegation also called on the President and the Prime Minister of Sri Lanka. The leadership briefed the Indian business representatives on the constructive measures undertaken by the government to foster a supportive economic climate, promote investment, and ensure fair and transparent business practices.

In addition, the delegation held wide-ranging discussions with several senior Ministers and officials of the Government of Sri Lanka, including the Minister of Energy; Minister of Industry and Entrepreneurship Development; Minister of Labour and Deputy Minister of Economic Development; Minister of Trade, Commerce, Food Security and Cooperative Development; and the Chairman of the Board of Investment of Sri Lanka. These discussions explored avenues for investment-led collaboration and sector-specific partnerships.

A key highlight of the visit was a CEOs’ Roundtable organised by the High Commission of India on 30 June at ITC Ratnadipa, in collaboration with the Ceylon Chamber of Commerce (CCC). The CCC delegation was led by Mr. Krishan Balendra, Chairman and CEO of John Keells Group. The Roundtable witnessed in-depth deliberations on strengthening bilateral economic cooperation and identifying new opportunities for collaboration. High Commissioner of India to Sri Lanka – Mr. Santosh Jha also participated in the interaction.

To mark the occasion, the High Commissioner hosted a networking reception that brought together prominent business leaders, senior ministers, and political leaders. The event also witnessed the participation of leading trade and industry chambers from across Sri Lanka.

The visit of the CII CEOs delegation successfully identified various areas of mutual interest for forging further economic linkages and trade connections. It also highlighted the commitment of apex Indian chambers of commerce, such as CII, to deepening existing economic ties, promoting investment-led partnerships, and exploring new avenues for collaboration between India and Sri Lanka.

The delegation included : 

• Dr Nandini Rangaswamy – Chairperson, GRG Educational Institutions & Managing Director, Chandra Group of Companies
• Dr S Chandrakumar – Founder & Executive Chairman Kauvery Group of Hospitals
• Mr CK Ranganathan – Chairman & Managing Director CavinKare Pvt Ltd
• Mr G R Anantapadmanaban – Managing Director GRT Group
• Mr VKC Razak – Chairman, CII Kerala State Council & Managing Director of VKC Footgear Pvt. Ltd.
• Mr Dipak Das – Managing Director Lanka IOC PLC
• Mr Christo George – Convenor CII Kerala Manufacturing MSME & Export Panel, Chairman and Managing Director of Hykon India Limited
• Mr Sohel Firoz Kazani – Founder and Managing Partner of Interport Impex Private Limited (Bharat Freight Group)
• Mr Sunin Sunny – CEO of Ecospice Ingredients Pvt Ltd.
• Mr Ravi Dolli – Member, CII Maharashtra Manufacturing Panel & CEO of Alloy Steels
• Mr Rahul Nayak – Head of International Business TVS Motor Company
• Ms Neerja Bhatia – Deputy Director General Confederation of Indian Industry
• Mr Saikat Roy Chowdhury – Executive Director of International Confederation of Indian Industry
• Mr Manish Mohan – Senior Director of International Confederation of Indian Industry

The Lanka Indian Oil Company (LIOC) has donated Rs. 100 million to the President’s Fund.

Mr. Dipak Das, Managing Director of Lanka Indian Oil Company, handed over the relevant cheque to Dr. Nandika Sanath Kumanayake, Secretary to the President, at the Presidential Secretariat today (July 04).

It is noteworthy that this donation is in addition to the contributions Lanka Indian Oil Company already makes to the education, health and cultural sectors in the country.

Mr. Roshan Gamage, Senior Additional Secretary to the President and a group of representatives from Lanka Indian Oil Company were also present at the occasion.

Mr. Das was a part of the CEOs delegation of the Confederation of Indian Industry (CII) who was in Colombo from June 29 – July 02.