Sri Lanka Plans 2025 Budget to Boost Growth, Meet IMF Targets

In his 2025 budget presentation, Sri Lanka's President Anura Kumara Dissanayake outlined a strategy focused on revenue-based fiscal consolidation, with no new taxes proposed. The budget aims to achieve a revenue target of 15.1% of GDP, driven by measures such as the liberalization of motor vehicle imports and adjustments to personal income tax. To support these goals, the government plans to implement 11 new legal reforms to enhance public service efficiency and attract foreign investment, aligning with commitments tied to a $3 billion IMF bailout package. The budget targets a budget deficit of 6.7% of GDP, alongside a primary surplus of 2.3% of GDP. Additionally, substantial efforts are being made to improve tax administration, compliance, and digitalization to enhance fiscal sustainability. Dissanayake emphasized the importance of equitable growth and prioritizing social returns in the use of tax revenues.