Sri Lanka President announces plans to raise PAYE tax threshold in 2027 Budget
Sri Lanka President Anura Kumara Dissanayake
Sri Lanka President Anura Kumara Dissanayake says the government plans to further increase the Pay As You Earn (PAYE) tax threshold through the 2027 Budget to provide additional tax relief to salaried employees.
The President made these remarks while addressing the National Trade Union Conference held in Colombo today (November 7, 2026).
He said the government had previously increased the monthly PAYE tax-free income threshold from Rs. 100,000 to Rs. 150,000 and now intends to raise it further through the 2027 Budget, which is scheduled to be presented to Parliament next week.
The President said the government plans to increase the threshold by a certain amount to further reduce the tax burden on employees. However, he did not specify the proposed new threshold.
Speaking about private sector employees, President Dissanayake said the private sector makes a major contribution to Sri Lanka’s economy and that the government has paid special attention to the financial situation of its workers.
He explained that the government had held discussions with private companies and relevant business associations before taking steps to increase the basic wages of private sector employees.
However, he acknowledged that the wage increase had not been sufficient to make a noticeable difference to employees and said the government had therefore also focused on their additional allowances.
“PAYE tax is the tax deducted from the salaries of higher earners. We raised its threshold from Rs. 100,000 to Rs. 150,000. We intend to increase that threshold by a certain amount in this Budget as well. This will allow us to provide some relief on PAYE tax,” the President said.
He further emphasised that the government has a responsibility to protect employees across all sectors, including the public, semi-government, plantation and private sectors.
President Dissanayake said the government had accepted this responsibility and remained committed to protecting the rights and financial security of all employees.