• Trade-related duty exemptions for BOI companies account for the vast majority of the total
• CID, PAL, and SSCL are key sources of exemptions, with VAT also contributing

Sri Lanka’s tax expenditure for exemptions given through trade-related duties amounted to Rs. 120.7 billion in the first five months of the year, Finance Ministry data showed.

According to the tax expenditure statement on Board of Investment (BOI) companies and Port City, the total tax exemption given through Sri Lanka Customs amounted to Rs. 120.7 billion by the end of May.

The total tax expenditure on BOI companies through trade-related duties amounted to Rs. 120.5 billion in the first five months, where exemptions through Customs Import Duty (CID) and Surcharges were at Rs. 36 billion, and Ports and Airport Levy (PAL) was at Rs. 30.3 billion.

Social Security Contribution Levy (SSCL) exemption on BOI companies in the first five months amounted to Rs. 31.8 billion.

Moreover, the tax expenditure for Port City Companies amounted to Rs. 131.3 million in the first five months, where CID took the highest exemption value of Rs. 59.9 million.

Further, data showed that the total tax expenditure for Value Added Tax (VAT) exemptions given through the Inland Revenue Department (IRD) for BOI companies in the first quarter of 2025 amounted to Rs. 9.8 billion, and exemptions for Strategic Development Projects (SDP) amounted to Rs. 628 million.

The highest VAT exemption of Rs. 5.9 billion was given to manufacturing-related BOI companies, while services and utilities took the second place with VAT exemption amounting to Rs. 2.5 billion.

Total VAT exemption given for BOI and SDP projects in 2024 amounted to Rs. 38.5 billion.

Port City VAT exemption in the first quarter of 2025 amounted to Rs. 10 million and the value of Rs. 190.4 million in 2024.