Sri Lanka’s 2027 Budget proposes VAT exemption for books and higher tax on imported sugar

AI-generated image

Sri Lanka’s 2027 Budget proposes removing Value Added Tax (VAT) on exercise books, textbooks and other printed books, while increasing the Special Commodity Levy on imported sugar by Rs. 10 per kilogram.

President Anura Kumara Dissanayake announced these proposals while presenting the 2027 Budget in Parliament on November 12, 2026, in his capacity as the Minister of Finance.

Under the proposed VAT exemption, textbooks, dictionaries, encyclopaedias, children’s drawing and colouring books, educational publications, other printed books and exercise books will be exempt from VAT.

According to the President, printed books and other printed materials became subject to VAT from January 2024, while exercise books had already been subject to VAT before that date.

He said the proposed exemption is intended to make essential educational materials more affordable and improve access to education, knowledge and reading.

Meanwhile, the government has proposed increasing the Special Commodity Levy on imported sugar by Rs. 10 per kilogram to support Sri Lanka’s domestic sugar industry.

The President said the increase is intended to reduce the tax difference between locally produced and imported sugar, allowing domestic sugar producers to compete more fairly in the market.

The proposal also aims to create equal competitive opportunities for both domestic and imported sugar while ensuring a more balanced and fair tax system.