Sri Lanka’s newspapers, book publishers and cinemas stand to gain from cost relief measures in Budget 2027, presented to Parliament on November 12.
Newsprint: The Ports and Airports Development Levy (PAL) on imported newsprint is to be abolished. According to the Ministry of Finance’s budget guide, the levy stood at 10%. Lanka Newspapers reported that the move is expected to ease pressure on the print media industry, which has faced rising import costs and a difficult advertising environment. The same report said the levy will also be removed on solar batteries.
Books: The import and supply of printed books and exercise books will be fully exempt from VAT, according to Lanka Business Online. The exemption also covers dictionaries, encyclopedias, children’s picture and colouring books, printed music and single-sheet printed matter.
The move follows earlier signals from the government. In September, President Anura Kumara Dissanayake said the government would take steps to remove VAT on school books. Prime Minister Dr. Harini Amarasuriya had also said the government was working on revising VAT on books through the upcoming Budget.
Cinemas: The Budget restructures how VAT is applied to the film industry. The VAT obligations of film producers, distributors, cinema hall operators and the National Film Corporation will be calculated on each party’s share of ticket revenue. This will be assessed on the ticket value after Entertainment Tax but before VAT.
Other VAT changes: The Budget also proposes giving electronic tax invoices the same legal validity as paper invoices, with technical standards to be gazetted by the Commissioner General of Inland Revenue. It would also remove the existing VAT exemptions on artemia eggs and coconut coir pith.
All the VAT measures will take effect once the amendments to the VAT Act are passed. The full impact of the PAL and CESS changes is expected to become clearer once formal details are gazetted.
