ECONOMYNEXT – The Sri Lanka Banks’ Affiliation has submitted a set of proposals for inclusion within the 2026 Nationwide Price range to Deputy Minister of Finance Anil Fernando.
“Proposals embody focused credit score assure schemes to assist revive distressed enterprises, accelerated tax deductibility for impairment provisions to encourage restructuring, and alignment of banking sector taxation with regional benchmarks.
“Extreme taxation, at present at 53% for home banks and 65% for overseas banks, is described as a barrier to competitiveness and capital formation.”
The SLBA urged the federal government to speed up SME formalisation by means of necessary VAT registration, the adoption of subsidised accounting software program, SME-specific enterprise financial institution accounts, and monetary literacy programmes.
It proposed necessary Taxpayer Identification Numbers for all new accounts, and incentives for SMEs to digitise transactions.
The sector beneficial rationalising oblique taxes, whereas broadening the tax internet by means of digitisation and the usage of proxy knowledge similar to utility and automobile information.
“Simplifying compliance by treating withholding tax as a ultimate tax, even at increased charges, was additionally advised as a means to enhance liquidity and general income assortment.”
The SLBA known as for funding within the nation’s digital infrastructure, and proposed making a nationwide cloud framework to serve each private and non-private stakeholders, alongside tax incentives for fintech startups and native fee gateways.
SLBA “pressured the significance of levelling the taking part in discipline by making use of VAT on international digital providers similar to Google, Meta, PayPal, whereas advancing digital transactions by capping giant money funds and mandating digital settlement of provider, tax and utility payments”.
A public–personal initiative on cybersecurity was additionally beneficial “to decrease compliance prices and safeguard systemic resilience”.
The SLBA urged expedited restructuring of SriLankan Airways to enhance the nation’s sovereign ranking, which it argued is a barrier to overseas direct funding.
The creation of regional one-stop outlets for regulatory approvals, reforms to facilitate Port Metropolis investments, and tax incentives for company bond issuances had been amongst different measures advocated.
“Banks additionally underlined the pressing have to mobilise capital for sustainable development, recommending tax exemptions for
inexperienced lending and the issuance of tax-free inexperienced bonds.
“Parallel proposals known as for tax-free public–personal partnership bonds to fund infrastructure and long-term growth wants.
The SLBA proposed nearer collaboration between authorities, regulators and the monetary sector to ship structural reforms.
Sectoral initiatives, together with long-term funding for tea replanting and agricultural mechanisation, had been additionally featured within the SLBA proposals. (Colombo/Sep26/2025)
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