The Electricity Consumers’ Association (ECA) stated that Budget 2027 had failed to provide sufficient tax relief for the renewable energy sector, warning that Sri Lanka could struggle to meet its target of generating 70 per cent of its electricity from renewable sources by 2030 unless taxes on renewable energy equipment are removed completely.

Speaking to The Daily Morning, the ECA General Secretary Sanjeewa Dhammika said that partial tax concessions would do little to encourage the expansion of renewable energy. “There is no point in giving a 10% or 20% concession. If we are serious about reaching the 70% renewable energy target by 2030, these taxes must be removed completely,” he said.

He said that the Government would not suffer a financial loss by giving up the tax revenue collected from renewable energy equipment, as the greater use of renewable energy would help the country reduce its dependence on imported fuel and save foreign exchange in the long run. “The State will not suffer a loss by forgoing these taxes. In the long run, it will help the country save Dollars.”

Dhammika further said that consumers currently pay taxes amounting to 22.5% on solar panels, 24.5% on inverters and 24.5% on solar batteries. Taxes on surge protection devices stand at 57.5%, cables at 52.5% and polyvinyl chloride accessories at 22.5%.

Dhammika also criticised the overall direction of the Budget, saying that the Government had missed an opportunity to provide relief to the wider public. “Even though there was an opportunity to provide relief to the entire population, this Budget has been designed to grant massive tax concessions only to large-scale businesses, while placing a heavy tax burden on ordinary people and middle-class salary earners. That is utterly deplorable,” he said.