Colombo, Nov 12 (PTI) Sri Lankan President Anura Kumara Dissanayake on Thursday presented the government budget for 2027 with the central theme of "economic stabilisation to expansion and transformation".

     Dissanayake, who is also the finance minister, has stepped into the third year of his administration, having inherited the economy from his predecessor Ranil Wickremesinghe, who was credited with reviving the economy from its state of collapse in 2022.

     Dissanayake said increasing domestic and foreign investment, expanding exports and production, creating employment opportunities, improving productivity, strengthening the capital market, and continuing fiscal discipline under the IMF programme remained priorities.

     He said the government was currently contemplating whether another IMF programme would be pursued, with the current bailout due to expire in March 2027.

     The budget provides for approximately LKR 2 trillion in capital expenditure meant to finance development and investment projects.

     His government continues to face large recurrent expenditure and debt servicing. The island under the IMF auspices, ventured to restructure over 46 billion USD of external debt after the 2022 meltdown.

     Dissanayake announced tax relief to employees by raising the threshold for pay-as-you-earn personal tax.

     The personal income tax threshold was raised to LKR 1.95 million from 1.80 million per annum.

     He proposed several pay enhancements by way of wage hikes, higher allowances and additional pension benefits.

     Dissanayake proposed removing VAT on school textbooks to improve access to education.

     The VAT revisions are expected to cause a slide in government revenue by LKR 2,975 billion.

     Sri Lanka will seek to expand FTA with India and pursue one with China. The budget proposed to award LKR 100 million to athletes who win gold at the Olympics and world championships. Commonwealth Games, Asian Games and SAARC gold medallists would be awarded LKR 75, 50 and 15 million respectively.

(This story has not been edited by THE WEEK and is auto-generated from PTI)
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