The government has decided to postpone the imposition of the VAT on digital services provided by non-residents to Sri Lankans via online platforms to 1 April 2026.

This was announced by Cabinet Spokesperson and Minister Dr. Nalinda Jayatissa during the weekly Cabinet press briefing, where he explained that even though the decision was to come into effect on 1 October, it was postponed due to several practical reasons.

He added that those providing such services had requested more time to adapt to the new tax, pointing out several practical reasons, which were taken into account.

Accordingly, the necessary changes will be done to the amendment bill that is currently being drafted.

The implementation of the decision to introduce an 18% value-added tax (VAT) on digital services provided by non-resident companies to local consumers, effective October, has been deferred to next year.

Under the value-added tax (Amendment) Act No. 4 of 2025, effective from 1 October, digital services provided by non-residents are subject to VAT.

The Cabinet of Ministers has also granted policy approval for the proposal presented by the President in his capacity as the Minister of Finance, Economic Stabilisation, and National Policies.