Cryptocurrency holdings, commercially valuable licences and high-value gems will be brought within Sri Lanka’s capital gains tax from 1 April 2027, under proposals in the 2027 Budget.

The government will amend Section 195 of the Inland Revenue Act to widen the definition of a “capital asset,” EconomyNext reported on Friday morning.

What comes into scope

Three classes of asset are named:

A 200 percent write-off for large investors

Running alongside the broader tax base is a substantial new incentive. From 1 April 2027, enterprises approved by the Board of Investment that invest at least US$3 million in export-oriented manufacturing or tourism development may opt to claim a 200 percent enhanced capital allowance on qualifying capital expenditure.

The option carries conditions. Investments must be completed within three years for manufacturing and non-hotel tourism projects, and within five years for hotels. Enterprises taking it up may not also claim existing capital allowances under the Fourth Schedule, or enhanced capital allowances under the Second Schedule, of the Inland Revenue Act.

EconomyNext draws one structural distinction worth noting. Existing Second Schedule concessions are tied both to depreciable assets and to where in the country the investment is made. The proposed allowance applies strictly to qualifying capital expenditure inside the stated window, with no location-based distinction — a design that sits awkwardly beside the Budget’s separate push to steer investment away from Colombo through a regional concession package, which this desk reported here.

Laws described as “shackles”

President Anura Kumara Dissanayake, presenting the Budget as Minister of Finance, put the legislative case bluntly.

“Some of our laws are over 100 years old, and the roles of some institutions have ended. They have become shackles preventing economic transformation.”

Three instruments are in train. An Investment Protection Bill has been referred to the Attorney General for clearance; it is intended to safeguard investor assets, guarantee fair and equal treatment, and set out rules for compensation and dispute resolution. A Public-Private Partnership bill has been gazetted and is to be tabled in parliament in early 2027. Laws have also been initiated to grant permanent residency to qualifying investors, with customs and labour law reforms flagged as following.

The promotion machinery is to be rebuilt as a 100 percent Treasury-owned company offering market-aligned salaries and staffed by private sector and international professionals, on the model used to establish GovTech.

Dissanayake also set a test for the package: “Every investment made by the government and every tax concession granted will be evaluated on the economic and social benefits they generate.”

VAT and capital market measures

Two VAT changes accompany the package. The definition of an “eligible exporter” will be amended to recognise newly VAT-registered persons whose exports exceed 80 percent of turnover in the preceding six months, removing the present one-year waiting period and easing cash flow for new exporters. For foreign-currency supplies, businesses must apply the Central Bank’s indicative exchange rate for VAT conversion, as specified by the Commissioner General of Inland Revenue.

The Budget also offers power tariff concessions for data centres, and says tax rules will be clarified to protect legitimate refunds and input tax credits.

On capital markets, the Treasury allocated Rs 500 million, alongside Rs 250 million from the Colombo Stock Exchange, to support small business listings and to fund share portfolios for selected 18-year-olds — the measure this desk covered as a share for every student.

Not reported

The filing gives no revenue estimate for the capital gains expansion and no cost estimate for the 200 percent allowance, so the net fiscal effect of the package is not on the record. It does not state the monetary threshold above which gems, jewellery and precious metals become taxable, who sets it, or whether it will be gazetted.

Nor does it say how gains on crypto assets are taxed at present, how holdings or disposals would be identified and valued for assessment, or what reporting obligations fall on exchanges or holders. It does not say whether licences already held are caught or only future transfers, nor how a telecommunications or broadcasting licence would be valued.

The report gives no allocation or staffing figure for the Treasury-owned promotion company, no date for the Investment Protection Bill’s return from the Attorney General, and no qualifying criteria for investor permanent residency.

On sourcing: this report rests on a single verified newsroom. Searches across the Daily Mirror, NewsFirst, Lanka Business Online, Daily FT, Island and Daily News returned their general Budget overviews rather than a separate filing on the capital gains expansion, and a keyword sweep of the Daily Mirror and Hiru News rails found none. The detail set out above appears to be an EconomyNext exclusive within Friday’s coverage. Readers should treat the specifics as that newsroom’s reading of the Budget documents until a second outlet files.

A note on the illustration. EconomyNext published this story with a summary infographic bearing a “Gemini Notebook” generation mark and containing garbled lettering. This desk does not republish AI-generated graphics as photographs of record, and has used a category placeholder instead.