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EDB Chairman Mangala Wijesinghe
By Charumini de Silva
Sri Lanka Export Development Board (EDB) Chairman Mangala Wijesinghe yesterday said the Government’s decision to reduce the export service tax from 30% to 15% marks a major boost for the service export sector, paving the way for growth.
Commenting on the policy change announced on 18 December, he said it was something that the industry along with the EDB lobbied for from the new administration.
“The move will have a transformative impact on industries such as ICT/BPM, financial services, construction, transport and logistics,” he told the Daily FT.
He stressed that the tax cut alleviates significant cost pressures faced by exporters under the previous rate, adding that it sends a strong signal of the Government’s commitment to boosting growth and competitiveness.
“By halving the tax burden, the Government has provided much-needed relief whilst reinforcing a business-friendly climate to attract both local entrepreneurs and foreign investors,” he said.
Wijesinghe expressed confidence that this move would allow service exporters to offer more competitive pricing to international clients, assisting them retain existing business and secure new opportunities.
“The service export sector plays a key role in our economy and this tax reduction will enable companies to reinvest in critical areas like technology, talent up-skilling and innovation. Such reinvestments will not only boost the quality of our exports, but also driver broader economic growth,” he explained.
Recalling on the challenges posed by the earlier 30% tax rate, the EDB Chief acknowledged that it had acted as a deterrent, discouraging investment and stifling growth in the sector.
He described the revised 15% rate as a balanced and pragmatic approach that supports industry expansion whilst meeting necessary Government revenue targets amid economic recovery process.
Sri Lanka’s service exports, which generated an estimated $ 3.17 billion during the first 11 months, are projected to reach $ 3.6 billion by year end.
The Chairman noted that this policy aligns with the EDB’s ambitious goal of achieving $ 11 billion in service export income by 2030.
“The policy revision is critical enabler for our long-term aspirations. It will attract inward investments, retain talent and encourage innovation across the board,” he added.
He expressed optimism that businesses previously constrained by the higher tax rates would now re-engage, scale operations and contribute to the sector’s growth.
